MASTER 

NEGATIVE 

NO.  94-82031 


COPYRIGHT  STATEMENT 


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Author: 

U.S.  Bureau  of 
corporations. 

Title: 

Farm-machinery  trade 
associations 

Place: 

Washington 

Date: 

1915 


MASTER   NEGATIVE  • 


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...   Earm-machinery  trade   associations,     March  15, 
1915.   Washington,  Govt,  print,  off.,  1915. 

xvi,  368  p.    diagr.   25*". 

At  head  of  title:  Department  of  commerce.    Bureau  of  corporations. 
Joseph  K.  Davies,  commissioner. 


1.  AKriculttiral  macliincry — Trade  and  manufacture — U.  S.    2.  Trade 
aliAiPM>f*awMnt  associations — U.  S.       i.  Title. 


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THE  LIBRARIES 


GRADUATE 

SCHOOL  OF  BUSINESS 

LIBRARY 


DEPARTMENT    OF    COMMERCE 
BUREAU  OF  CORPORATIONS 

JOSEPH  E.  DAVIES,  Commissioner 


FARM-MACHINERY  TRADE 
ASSOCIATIONS 


MARCH   IS,  1915 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1915 


CONTENTS. 


ADDITIONAL  COPIES 

0»  THIS  PtTBLICATION  MAY  BE  PROCURED  ROll 

rant  suPEKrarxENDENT  or  documents 

GOTEBmCXNT  PRINTINO  OVHCB 

WASaiNOTOH,  D.  C 

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Page. 

Letters  of  transmittal ^^ 

Letter  of  submittal n 

CHAPTER  I.— ORGANIZATION      AND      DEVELOPMENT      OF 

ASSOCIATIONS. 

Sec.  1.  An  organized  industry \ 

Organization  of  manufacturers 2 

Jobbers' clubs 3 

Organization  among  dealers 4 

2.  The  development  of  associations 6 

System  of  distribution g 

Associations  of  manufacturers g 

State  and  interstate  associations  of  dealers 9 

'               Local  clubs n 

3.  Early  activities  of  associations u 

CHAPTER  II.— WHOLESALE    PRICE   ACTIVITIES    OF   MANU- 
FACTURERS' ASSOCIATIONS. 

Sec.  I,  Introduction 2I 

2.  Activities  of  the  National  Wagon  Manufeicturers'  Association 22 

3.  Activities  of  the  National  Plow  Association 41 

4.  Activities  of  the  National  Implement  <fc  Vehicle  Association  and  its 

special  trade  departments 4$ 

National  Implement  &  Vehicle  Association 46 

Departments  of  the  National  Implement  &  Vehicle  Association 47 

5.  Significance  of  cost-accounting  system  in  relation  to  selling  prices 54 

6.  Activities  of  the  National  Association  of  Thresher  Manufacturers 55 

CHAPTER  III.— EFFORTS    OF    MANUFACTURERS'    ASSOCIA- 
TIONS TO  REDUCE  COSTS. 

Sec.  1.  Introduction 57 

2.  Standardization  of  materials 53 

National  Wagon  Manufacturers'  Association 58 

National  Plow  Association 63 

National  Implement  &  Vehicle  Association 65 

3.  Charges  for  transportation 67 

4.  Fire  insurance 74 

6.  Limiting  credit  risks 76 

Cooperation  in  judging  credits 76 

Sec  uri  ty  for  sales 79 

Credits  in  the  thresher  trade 60 

Improving  financial  condition  of  dealers 81 

0.  Reduction  in  costs  of  distribution 84 

in 


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IV 


CONTENTS. 


CHAPTER  IV.— ACTIVITIES     OF     MANUFACTURERS'     ASSO- 
CIATIONS WITH  RESPECT  TO  LEGISLATION. 

Pwre. 

Sec.  1.  Introduction 89 

2.  Taaoition  of  corporations 93 

State  taxation  of  foreign  corporationfl 93 

Federal  corporation  tax 96 

3.  Legislation  relating  to  tariff  and  foreign  trade 97 

4.  Patentlaws 102 

5.  Industrial  indemnity  and  indemnity  insurance 104 

6.  Opposition  to  prison  factory  legislation 107 

CHAPTER  V.-CONCENTRATION  IN  OWNERSHIP  OF  WIND- 
STACKER  PATENTS. 

Sec.  1.  Introduction HI 

2.  Origin  of  the  wind-stacker  patents-license  system Ill 

8.  Controversy  between  the  Indiana  Manufacturing  Co.  and  the  J.  I.  Case 

Threshing  Machine  Co -.  114 

4,  Results  of  settlement  with  the  Case  company 119 

5.  Significance  of  the  patents-license  system - 125 

CHAPTER  VI.— RESTRICTION  OF  RETAIL  TRADE  TO  RETAIL 

DEALERS. 

Sec.  1.  Introduction - 128 

The  dealers' claim  to  the  retail  trade 128 

Negotiations  with  harvesting-machine  companies 132 

2.  Cooperation  between  federated  dealers  and  organized  manufacturers...  133 

Establishment  of  harmonious  relations  between  dealers'  and  man- 
ufacturers' organizations 133 

Directories  of  regiilar  dealers 134 

Commercial  agency  reports 136 

Conferences  between  representatives  of  dealers'  and  manu- 

focturers'  organizations 136 

Opposition  to  manufacturers'  branch  retail  tores 138 

Direct  sales  in  localities  where  manufacturer  has  no  agent 143 

Dealers' associations  and  the  thresher  trade 146 

3.  Settlement  of  complaints  against  individual  manufacturers 147 

Methods  of  adjustment  by  State  associations 147 

Adjustment  by  cooperation  with  jobbers'  clubs 150 

Methods  of  adjustment  used  by  Federation 152 

Court  decision  against  methods  used  by  Iowa  Implement  Dealers' 

Association 154 

Changes  in  articles  of  association  following  court  decisions 158 

Government  investigation  of  protective  activities  of  associations. .      163 

Plan  of  handling  complaints  in  1911  and  1912 172 

Negotiations  with  manufacturers  relative  to  farmers'  cooperative 

stores 175 

Opinions  of  the  trade  as  to  protective  activities  of  associations 182 

Protective  ac  tivities  not  confined  to  implement  trade 183 

4.  Methods  used  with  manufacturers  unwilling  to  settle  complaints  amica- 

bly       185 

Information  Bureau 186 

Information  supplied  by  association  secretaries  on  request  of  indi- 
vidual members 189 

Present  methods  of  disseminating  information  among  dealers 192 


CONTENTS.  V 

Page. 

Sec.  5.  Opposition  to  mail-order  or  catalogue  houses 193 

Sales  to  mail  order  houses  by  manufacturers 193 

Parcel-post  legislation 1^8 

Legislation  against  misrepresentation  in  advertising 202 

.    Farm-paper  advertising 203 

Chautauqua  home-trade  talks 206 

CHAPTER  VII.— PREVENTION  OF  PRICE  CUTTING  AMONG 

REGULAR  DEALERS. 

Sec.  1.  Introduction 207 

2.  Resale-price  maintenance 207 

3.  Price  agreements  among  dealers 208 

4.  Exchange  of  information  through  local  clubs 211 

5.  Prices  based  on  uniform  method  of  computing  costs 218 

6.  Significance  of  cost  suggestions  as  a  basis  for  retail  prices 241 

« 


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LIST  OF  EXHIBITS. 


I  Constitution  and  by-laws  of  the  National  Implement  A  Vehicle  Aflsociation.      246 
2!  Constitution  and  by-laws  of  the  wagon  department  of  the  National  Im- 

plement  &.  Vehicle  Association •  •  •  *      ^ 

8.  Constitution  and  by-laws  of  tiie  sales  manageii*  department  of  the  National 

Implement  &  Vehicle  Association ; 

4.  List  of  officera  and  committees  of  tiie  National  Implement  A  Vehicle  Assoa- 

ation,  as  of  August  20, 1914 V:\"V"''':, i 

o.  List  of  memben  of  the  National  Implement  A  Vehicle  Association,  as  of 

August  20, 1914 ...........-•••• 

«.  List  of  membew  of  tiie  farm-wagon  department  of  tiie  NaUonal  Implement 

A  Vehicle  Association,  as  of  August  20, 1914 

7.  List  of  members  of  tiie  plow  and  tillage  department  of  tiie  National  Imple- 

ment  A  Vehicle  Association,  as  of  August  20, 1914 :':r  V"; 

8.  list  of  memben  of  tiie  grain  drill  and  seeder  department  of  tiie  NaUonal 

Implement  A  Vehicle  Association,  as  of  August  20, 1914 ................      ^^ 

9.  List  of  membeiB  of  tiie  sales  managers'  department  of  tiie  National  Imple- 

ment A  Vehicle  Association,  as  of  August  20,  1914.. -  ---      ^6-5 

10.  list  of  members  of  tiie  foreign-trade  managers'  department  of  tiie  NaUonal 

Implement  A  Vehicle  Association,  as  of  August  20,  1914 ^ 

II  Report  of  committee  of  National  Wagon  ManufacUirers'  Assormtion,  ap- 

pointed in  November,  1903,  to  formulate  a  plan  for  tiie  better  mamtam- 
ingofprices;  report  made  to  association  February  3, 1904...............      284 

12.  Question  sheet  relative  to  prices  of  members,  issued  by  tiie  NaUonal  Wagon 

Mwiufactureis*  Association  January  1,  1906 '.'"': I 

13.  Kepiesentative  sheets  showing  differences  in  standard  specificaUons  and 

equipment  for  farm  wagons  sold  in  different  temtonee,  adopted  by  tiie 
National  Wagon  Manufacturers'  Association  in  1908 .--.•      -*» 

14.  General  letter  issued  by  tiie  National  Wagon  ManufacUirers'  Association 

relative  to  trade  conditions  in  December,  1908 ••" 

15.  Revised  tire  list,  wagon  deparUnent,   National  Implement  A  Vehicle 

•        .  ^ ^^ 

Association .  •  4  j    * 

16   "Extra"  or  '^repair"  price  list  suggested  by  special  committee  appomted  at 

conference  of  farm-wagon  manufacturers  at  Chicago  June  5, 1912 272 

11   Biper  on  slandardization  of  farm  wagons,  read  before  AmencauSociety  of 

Agricultiiral  Engineers  by  E.  E.  Parsonage,  of  John  Deere  Wagon  Ck)., 

December  30,  1913 ; " ••      ^* 

18.  Recommendations  of  the  National  Plow  Association  to  its  ^^^^^J^'      0^ 

ing  list  prices,  standard  specifications,  equipment,  etc. ,  1907-1909 ......      -OZ 

B.  Report  of  committee  on  shop  costs  and  seUing  expenses  to  NaUonal  Associa- 

tion  of  Thresher  ManufMrtareis,  August,  1904 -•      ^w» 

m  Form  of  ficease  contract  used  by  tiie  Indiana  Manufacturing  Co.  autiiona- 

ing  the  use  of  its  patents,  1914 ^w 

II.  Form  of  patents-purchaie  agreement  between  tiie  Indiana  ManufacUinng 

Co.  aid  HMBMii... 


LIST   OF   EXHIBITS. 


vn 


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«> 


"     ^ 


Page. 

22.  Form  of  royalty  report  required  of  licensee  of  Indiana  Manufacturing  Co. .       305 

23.  Constitution  and  by-laws  of  the  National  Federation  of  Implement  & 

Vehicle  Dealers'  Associations ^'^ 

24.  Uniform  articles  of  association  recommended  in  1904  by  the  National 

Federation  of  Implement  &  Vehicle  Dealers'  Associations  for  adoption 

by  constituent  associations 310 

25.  Uniform  articles  of  association  recommended  by  National  Federation  of 

Implement  A  Vehicle  Dealers'  Associations  for  adoption  by  local  clubs 

of  dealers ^^^ 

26.  Number  of  members  of  retail  implement  dealers'  associations  affiliated 

with  the  National  Federation  of  Implement  &  Vehicle  Dealers'  Asso- 
ciations, 1901-1913 318 

27.  Card  entitled  " Simple  susgestions  on  cost  figuring,"  issued  in  December, 

1909,  for  information  of  dealers 319 

28.  "Cost  suggestions  No.  2,"  issued  by  Cost  Educational  Association  in  May, 

1910 V     -       320 

29.  Cost  system  reconunended  for  the  use  of  the  members  of  the  National 

Implement  A  Vehicle  Association 323 

80.  Location  and  number  of  members  of  dealers'  local  clubs  organized  from 

January  29, 1913,  to  May  29, 1914 336 

31.  The  implement  dealer  and  his  problems.     Address  by  the  Secretary  of  the 

National  Federation  of  Implement  &  Vehicle  Dealers'  Associations 
before  the  members  of  the  National  Implement  &  Vehicle  Association, 
October  22,  1914 337 

32.  Resolutions  adopted  by  the  National  Implement  &  Vehicle  Association 

at  the  annual  convention  held  October  21,  22,  and  23, 1914 349 


V 


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LETTERS  OF  TRANSMITTAL. 


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Department  of  Commerce, 

Office  of  the  Secretary, 

Washington,  March  15, 1915, 
Sir:  I  transmit  herewith  a  report  of  the  Commissioner  of  Corpo- 
rations on  Farm-Machinery  Trade  Associations.    This  report  deals 
with  the  activities  of  associations  of  implement  and  vehicle  manu- 
facturers and  dealers. 

Very  respectfully,  William  C.  Kedfield, 

Secretary, 

The  President. 


#,# 


Department  of  Commerce, 

Bureau  of  Corporations, 

Washington,  March  15, 1915. 

Sir:  I  have  the  honor  to  transmit  herewith  a  report  on  Farm- 
Machinery  Trade  Associations,  made  to  the  President  under  your 
direction  and  in  accordance  with  the  law  creating  the  Bureau  of 
Corporations.  This  report  deals  with  the  activities  of  associations 
of  implement  and  vehicle  manufacturers  and  dealers. 

I  desire  to  mention  as  especially  contributing  under  my  direction 
to  the  preparation  of  this  report  Messrs.  Harry  C.  McCarty  and 
Worthy  P.  Sterns,  of  this  Bureau. 

Very  respectfully,  Joseph  E.  Davies, 

Commissioner  of  Corporations, 

To  Hon.  William  C.  Redfield, 

Secretary  of  Commerce. 


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Department  of  Commerce, 

Bureau  of  Corporations, 
Washington,  March  15,  1916. 
Sir  :  I  have  the  honor  to  submit  herewith  a  report  on  the  principal 
associations  in  the  farm-machinery  trade. 

AN   ORGANIZED   INDUSTRY. 

Ahnost  every  important  manufacturer  in  the  farm-machinery  in- 
dustry is  a  member  of  the  National  Implement  &  Vehicle  Associa- 
tion. The  dealers  in  farm  machinery  have  organized  the  National 
Federation  of  Implement  &  Vehicle  Dealers'  Associations,  which  is 
composed  of  niunerous  State  and  interstate  associations.  These  two 
organizations  are  national  in  scope  and  work  in  close  cooperation. 

EFFORTS  OF   MANUFACTURERS'  ASSOCIATIONS   TO   FIX  WHOLESALE   PRICES. 

In  the  earlier  days  the  various  associations  of  manufacturers  of 
farm  machinery,  implements  and  vehicles,  had  agreements  as  to 
uniform  prices.  Such  agreements  were  difficult  to  maintain  on 
account  of  wide  variations  in  the  construction  and  cost  of  machines 
of  different  manufacturers. 

Later,  the  National  Wagon  Manufacturers'  Association  from  time 
to  time  adopted  recommendations  that  each  member  should  advance 
prices  by  the  same  per  cent.  Active  efforts  were  made  to  secure  com- 
pliance with  these  recommendations.  Prices  for  certain  parts  of  farm 
wagons,  approved  by  the  association,  were  also  recommended  to  mem- 
bers for  adoption. 

The  organized  plow  manufacturers  use  standard  classifications, 
standard  equipment  for  various  implements,  and  uniform  list  prices 
on  some  of  their  products,  with  differentials  for  specified  variations 
from  the  standard  adopted.  These  prices  are  subject  to  such  discount 
as  individual  members  may  desire  to  give.  Advances  in  list  prices 
have  apparently  been  used  as  a  means  of  advancing  net  prices. 

The  National  Association  of  Thresher  Manufacturers  has  at  va- 
rious times  approved  lists  of  net  "  amounts,"  or  prices  below  which 
it  was  claimed  members  could  not  sell  except  at  a  loss.    In  1909, 


'pv 


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LETTEB  OF  SUBMITTAL. 


some  members  who  were  reported  to  liave  engaged  in  price  cutting 
were  asked  to  reconsider  their  prices. 

Both  the  wagon  and  plow  associations  also  attempted  to  secure 
greater  uniformity  in  construction  in  order  to  facilitate  price  agree- 
ments. 

UNIFOBMITY  OF  COBfT  ▲CCOUNTB  AS  A  MEANS  OF  PRICE  OONTSOL. 

The  fe«  of  prosecution  under  the  antitrust  laws,  as  weU  as  prac- 
tical  difficulties  in  making  direct  price  agreements,  led  to  other 
methods  of  influencing  prices. 

Cooperation  in  efforts  to  maintain  prices  made  it  apparent  that 
this  object  could  be  more  easily  attained  if  each  manufacturer  made 
full  allowance  for  every  element  of  cost  as  a  basis  for  determining 
profitable  prices.  For  this  purpose  uniform  cost-accounting  systems 
were  devised  in  order  that  prices  based  on  costs  so  computed  would 
be  sure  to  afford  a  profit.  Costs  were  made  to  include  not  only  every 
item  of  actual  expense  and  depreciation,  but  also  provision  for  in- 
terest on  investment.  This  plan  was  adopted  by  the  wagon  and  the 
plow  associations  and  later  by  the  National  Implement  &  Vehicle 
Association,  in  which  they  were  merged. 

Exchange  of  information  regarding  the  costs  computed  in  this 
manner  and  the  prices  actually  received,  affords  a  means  for  de- 
termining prices  profitable  to  all.  If  the  individual  members  fix 
their  prices  accordingly,  substantial  uniformity  in  prices  may  be 
established  as  effectively  as  by  an  express  price  agreement. 

■FFOirrS  TO  BEDUCaS  CX>8T8  OF  MANUFACTURE  AND  DISTRIBUTION. 

These  manufacturers'  associations  have  also  attempted  to  increase 
profits  by  reducing  costs.  These  efforts  have  been  mainly  in  stand- 
ardizing specifications  for  materials  and  construction,  in  securing 
lower  freight  rates,  in  procuring  insurance  at  reduced  cost,  in  limit- 
ing credit  risks,  and  in  eliminating  various  items  of  selling  expense. 

Some  of  the  suggestions  made  for  reducing  the  cost  of  selling  goods 
are  significant,  especially  the  elimination  of  canvassers,  commission 
contracts,  and  the  sale  of  goods  on  exceptionally  long  terms. 

■FFORTS  TO  SECURE  FAVORABLE  LEGISLATION. 

Among  "the  matters  of  legislation  to  which  the  manufacturers'  asso- 
ciations have  given  special  attention  are:  Taxation  of  corporations, 
industrial  indenmity,  manufacture  of  implements  and  twine  at  State 
penal  institutions,  the  tariff,  and  patents. 

Efforts  of  manufacturers'  and  dealers'  associations  to  influence 
legislation,  both  State  and  national,  have  taken  various  forms.  Mem- 
ben  have  been  urged  to  write  or  telegraph  to  legislators  at  a  givoi 


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LETTER  OF   SUBMITTAL. 


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time;  delegates  have  presented  the  views  of  the  associations  before 
legislative  committees,  and  these  associations  have  cooperated  with 
organizations  in  other  branches  of  industry  when  legislation  affect- 
ing their  common  interests  was  under  consideration. 

The  National  Federation  of  Implement  &  Vehicle  Dealers'  Associa- 
tions is  affiliated  with  the  National  Federation  of  Retail  Merchants, 
and  various  manufacturers  belonging  to  the  National  Implement  & 
Vehicle  Association  are  also  members  of  the  National  Association  of 
Manufacturers.  These  affiliations  afford  a  means  of  cooperation  with 
other  trade  associations  in  expression  of  views  regarding  proposed 
legislation. 

EFFECT    OF    CONCENTRATED    CONTROL    OF    PATENTS    ON    PRICE    OF    WIND 

STACKERS. 

The  wind-stacker  attachment  for  threshing  machines  is  sold  at  a 
uniform  price;  this  is  accomplished  through  a  system  of  uniform 
patent-license  contracts.  The  principal  wind-stacker  patents  are 
owned  or  controlled  by  the  Indiana  Manufacturing  Co.,  and  most  of 
the  stock  of  this  concern  is  owned  by  the  managing  directors  of  one 
of  the  chief  threshing-machine  manufacturing  companies.  Manu- 
facturers using  these  patents  must  pay  a  fixed  royalty  on  each  wind 
stacker  made,  and  agree  to  maintain  a  uniform  selling  price. 

The  particular  facts  with  respect  to  this  situation  raise  several 
questions  of  public  concern,  namely,  whether  the  Indiana  Manufac- 
turing Co.'s  control  of  wind-stacker  patents  transcends  the  monopoly 
contemplated  by  the  patent  laws;  whether  the  method  by  which 
various  patentees  are  induced  to  pool  their  patents  is  obnoxious  to 
the  antitrust  laws;  whether  the  control  of  the  said  company  by  the 
managing  directors  of  one  of  the  licensees  is  compatible  with  public 
policy;  and  whether  the  said  company  may,  in  its  license  contracts, 
lawfully  fix  the  selling  prices  of  wind  stackers  made  under  its  patents. 

THE  CONTROL  OF  RETAIL  PRICES. 

"^he  prevention  of  price  cutting  among  retailers  and  the  raising 
of  retail  prices  have  been  a  matter  of  great  concern  to  the  implement 
and  vehicle  trade. 

The  associations  of  dealers  have  sought  from  the  beginning  to  dis- 
courage the  practice  of  price  cutting,  and  certain  small  associations 
in  some  instances  have  attempted  to  fix  the  prices  at  which  their 
members  should  sell.  Later,  the  principal  associations  gave  consid- 
erable attention  to  the  possibility  of  securing  greater  harmony  among 
competing  dealers  by  the  organization  of  local  clubs.  At  the  meet- 
ings of  these  local  clubs  the  question  of  prices  was  often  discussed. 

Some  implement  manufacturers  have  sought  the  solution  of  this 
problem  by  fixing  retail  prices  in  their  agency  contracts  with  dealers, 


\ 


XIV 


UlTTER  OF   SUBMITTAL. 


a  practice  which  has  been  expressly  favored  by  some  dealers'  asso- 
ciations. 

In  1909  a  movement  was  inaugurated  by  the  organized  manufac- 
turers to  secure  the  cooperation  of  all  classes  of  the  trade  in  aiding 
retailers  to  secure  higher  prices,  by  educating  them  to  the  necessity 
of  computing  all  items  of  expense  in  fixing  their  prices.  Cost  sug- 
gestions enumerating  such  items  were  prepared  by  the  manufacturers 
and  given  wide  circulation  among  the  dealers.  The  fact  that  the 
dealer's  were  urged  to  include  in  their  costs  allowances  for  interest 
on  investment,  rent  of  buildings  owned  and  used,  and  salary  for  the 
owner  of  the  business,  clearly  shows  that  these  cost  suggestions  were 
intended  as  a  method  of  establishing  a  basis  at  which  dealers  could 
sell  at  a  profit. 

The  success  of  this  plan,  however,  requires  that  it  be  followed  by 
all  dealers  in  the  same  locality.  The  organized  manufacturers  and 
dealers  therefore  undertook  a  campaign  to  promote  local  clubs  which 
should  include  all  dealers  in  each  locality.  The  local  clubs  were  urged 
to  adopt  these  cost  suggestions  but  to  avoid  price  agreements. 

The  manufacturers'  association  has  suggested  that  each  local  club 
should  ascertain  the  average  percentage  of  selling  cost  to  sales  for 
all  of  its  members.  The  use  of  this  average  cost  by  each  member  in 
fixing  his  own  prices  at  once  suggests  itself. 

Such  a  practice  would  tend  to  raise  the  general  level  of  retail 
prices,  and  would  militate  against  the  independent  action  of  dealers 
in  the  same  locality  in  making  pricea 

OPPOSITION  OF  DEALEHS  TO  DIRECT  SALES  AND  SALES  THB0I7GH  IBREGULAR 

DEALERS. 

The  fundamental  idea  of  the  federated  associations  of  implement 
and  vehicle  dealers  is  that  "to  the  retail  dealer  belongs  the  retail 
trade."  They  insist,  especially,  that  it  is  wrong  for  any  manufac- 
turer who  sells  through  regular  dealers  also  to  use  any  other  method 
of  distribution  which  threatens  to  impair  the  trade  of  the  dealers. 
Hence,  they  offer  vigorous  opposition  to  direct  sales  to  farmers,  to 
sales  made  through  irregular  dealers,  and  to  sales  through  mail- 
order houses. 

The  opposition  to  these  forms  of  distribution  is  based  on  the  claim 
that  sales  so  made  are  made  at  prices  which  are  demoralizing  to  the 
trade  of  the  regular  dealer,  who  is  obliged  to  maintain  a  store  with 
a  stock  of  goods  suflScient  to  meet  the  demands  of  the  locality.  The 
dealers'  associations  contend  further  that  the  plan  of  selling  through 
a  regular  dealer  is  more  economical  for  the  manufacturer  than  any 
other  plan  of  distribution,  and  that  the  dealer  renders  better  service 
to  the  farmer. 


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LETTER  OF  SUBMITTAL. 

This  claim  of  the  dealers  to  the  retail  trade  has  been  indorsed  by 
the  National  Implement  &  Vehicle  Association.  The  latter,  and  also 
various  jobbers'  organizations,  have  cooperated  with  the  dealers  in 
enforcing  this  claim.  The  dealers'  associations  have  facilitated  such 
cooperation  in  various  ways,  including  the  publication  of  directories 
containing  the  names  of  regular  dealers. 

METHODS  OP  ENFORCING  DEALERS'   CLAIM  TO  THE  RETAIL  TRADE. 

The  great  problem  of  the  dealers'  associations  has  been  to  find 
some  lawful  means  by  which  the  members  may  be  notified  of  the 
name  of  anv  manufacturer  who  declines  to  confine  his  trade  to  the 
regular  dealer. 

The  adjustment  of  complaints  against  individual  manufacturers 
who  have  made  direct  and  irregular  sales  has  been  an  important  part 
of  the  work  of  the  dealers'  associations.  When  a  complaint  of  this 
sort  is  filed  with  one  of  the  associations,  its  secretary  endeavors  to 
arrange  a  settlement,  sometimes  by  collecting  a  commission  and  se- 
curing a  promise  that  such  sales  be  discontinued.  Most  complaints 
are  adjusted  by  the  secretary.  Complaints  which  can  not  be  settled 
in  this  way  are  referred  to  a  committee  of  the  association  before 
whom  the  manufacturer  is  sometimes  invited  to  explain  his  position. 

Members  of  some  of  the  earlier  dealers'  associations  agreed  to  with- 
draw their  trade  from  manufacturers  who  refused  to  settle  com- 
plaints to  the  satisfaction  of  the  dealers,  and  until  within  the  last 
few  years  the  names  of  such  manufacturers  appear  to  have  been 
freely  discussed  before  the  entire  membership  of  the  various  dealers' 
associations. 

An  attempt  in  1905  to  install  an  information  bureau  to  furnish 
dealers  with  the  names  of  offending  manufacturers  and  jobbers  was 
not  carried  to  completion  owing  to  some  doubt  as  to  its  legality. 
Members  of  the  various  associations  have  been  notified,  however,  that 
upon  request  to  the  secretary  of  the  association  of  which  they  are 
members  they  would  be  furnished  with  information  as  to  the  trade 
policy  of  any  manufacturer. 

Court  decisions  adverse  to  such  activities  of  dealers'  associations, 
and  investigations  by  the  Government,  have  caused  the  federated  im- 
plement and  vehicle  dealers  in  recent  years  to  be  cautious  in  handling 
complaints.  At  present  the  federated  dealers'  associations  appear  to 
rely  principally  upon  the  National  Implement  &  Vehicle  Asso- 
ciation and  the  various  jobbers'  clubs  to  persuade  their  members 
to  confine  their  trade  to  the  regular  dealer.  There  are  some  manu- 
facturers, however,  who  will  not  sell  exclusively  through  regular 
dealers  unless  they  are  compelled  to.  The  dealers  desire,  therefore, 
to  create  amongst  such  manufacturers  a  belief  that  the  dealers  will 


X?I 


LETTER  Ot  SUBMITTAL. 


Withhold  their  patronage  if  they  persist  in  ignoring  the  dealers' 
damis.  As  already  noted,  the  National  Federation  of  Implement  & 
Vehicle  Dealers'  Associations  is  aflUiated  with  the  National  Federa- 
tion of  Retail  Merchants,  and  the  latter  organization  has  sought 
to  secure  legislation  from  Congress  under  which  retail  associations 
may  legaUy  furnish  their  members  with  information  regarding  manu- 
facturers whose  trade  policy  they  object  to.      . 

While  the  organized  dealers  disclaim  any  intention  of  maintain- 
ing a  black  list  or  of  instituting  a  boycott  against  anyone,  it  is  clear 
that  If  they  be  permitted  to  dissemmate  information  of  this  character, 
those  loyal  to  the  principles  of  their  associations  would  refuse  to  con- 
tmue  business  relations  with  offendmg  manufacturers  even  in  the 
absence  of  am  express  agreement  to  do  so. 

OPPOSmON  TO  MAIL-ORDER  COMPETTnON. 

A  determined  fight  has  been  made  by  the  organized  dealers  against 
the  competition  of  mail-order  houses.    They  have  not  only  tried  to 
prevent  manufacturers  from  supplying  implements  to  such  concerns, 
but  also  have  conducted  a  campaign  to  prevent  the  establishment  of 
a  parcel  post,  on  the  theory  that  such  facilities  would  benefit  the 
mail-order  houses.    Since  the  establishment  of  the  parcel  post  they 
have  urged  a  revision  of  postal  rates,  with  a  view  to  increasing  the 
charges  on  parcels.    Their  opposition  to  the  mail-order  houses  has 
also  been  the  reason  for  favoring  a  Federal  law  to  compel  all  manu- 
facturers  to  brand  their  names  upon  their  products  in  order  to 
identify  manufacturers  who  sell  to  mail-order  houses,  and  for  favor- 
ing both  Stat^  and  national  legislation  to  prevent  misrepresentation 
m  advertising  because  of  the  belief  that  such  laws  would  compel  a 
modification  of  claims  made  in  mail-order  advertisements.    The  or- 
ganized manufacturers  and  dealers  have  also  made  earnest  efforts  to 
curtail  the  advertising  facilities  of  mail-order  houses  by  persuading 
manufacturers  who  sell  through  dealers  not  to  advertise  in  farm 
papers  which  contain  mail-order  advertisements,  or  encourage  buy- 
ing from  mail-order  houses. 

CDNCaLUSION. 

In  conclusion  it  may  be  observed  that  while  a  large  part  of  the 
activities  of  the  manufacturers'  and  dealers'  associations  in  this 
branch  of  industry  are  proper  for  the  protection  of  legitimate  inter- 
ests,  yet  there  are  others  of  doubtful  legality  which  tend  to  limit  the 
field  of  competition  and  to  enhance  prices. 
Very  respectfully, 

Joseph  E.  Da  vies, 

^     ^  Oommisaioner  of  Oorporatiom. 

The  President. 


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REPORT  OF  THE  COMMISSIONER  OF  CORPORATIONS 
ON  FARM-MACHINERY  TRADE  ASSOCIATIONS. 


CHAPTER  I. 


OEGANIZATION  AITD  DEVELOPMENT  OF  ASSOCIATIOKS. 

Section  1.  An  organized  industry. 

Taken  as  a  whole,  the  manufacture  and  sale  of  farm  machinery, 
implements,  and  vehicles  is  one  of  the  most  important  industries  of 
the  country.  The  aggregate  investment  of  companies  engaged  therein 
amounts  to  over  half  a  billion  dollars.  These  goods  are  made  in 
more  than  a  thousand  factories.  The  employees  in  these  factories 
number  more  than  100,000,  and  probably  nearly  as  many,  in  one 
capacity  or  another,  are  engaged  in  the  wholesale  and  retail  distri- 
bution of  the  product.  Of  these,  over  40,000  are  retail  dealers.  Re- 
tail sales  of  farm  machinery,  implements,  and  vehicles  to  the  Amer- 
ican farmer  can  not  be  closely  determined,  but  they  amount  to  several 
hundred  million  dollars  annually.  The  utility  of  this  equipment  in 
increasing  the  country's  agricultural  output  is  incomparably  greater. 

While  the  total  number  of  manufacturers  engaged  in  this  industry 
is  large,  the  great  bulk  of  the  business  is  in  the  hands  of  a  compara- 
tively few  companies.  The  assets  of  one  of  these  companies  amount 
to  about  125  million  dollars.  The  assets  of  three  others  amount  to  as 
much  more.  Over  three-fourths  of  the  40,000  retail  dealers  sell  im- 
plements made  by  the  International  Harvester  Co.  Several  other 
manufacturers  are  represented  by  from  10  to.  15  thousand  dealers. 
Most  dealers  buy  from  a  number  of  manufacturers,  since  no  manu- 
facturer can  furnish  all  of  the  extraordinary  variety  of  articles 
included  in  the  equipment  of  the  modern  farm. 

Probably  over  three-fourths  of  the  capital  invested  in  the  manu- 
facture of  farm  machinery,  implements,  and  vehicles  is  represented 
in  the  membership  of  the  National  Implement  &  Vehicle  Associ- 
ation. This  membership  includes  practically  all  the  leading  manu- 
facturers of  such  equipment.^  The  National  Federation  of  Imple- 
ment &  Vehicle  Dealers'  Associations  is  not  so  representative.  The 
membership  of  its  constituent  associations,^  however,  includes  large 


r 


1  See  Exhibit  5»  p.  259. 
e8248'— 16 ^1 


>  See  Exhibit  26,  p.  318. 


2 


FARM-MACHINBKY  TRADE  ASSOCIATIONS. 


OEGANIZATION   AND  DEVELOPMENT  OF  ASSOCIATIONS. 


s 


numbers  of  the  most  influential  dealers  in  those  sections  of  the  coun- 
try where  the  implement  trade  is  of  great  importance. 

Practically  all  of  the  important  farm-machinery  trade  associations 
in  the  United  States  cooperate  with  each  other  under  the  leadership 
of  these  two  organizations.  Harmonious  cooperation  between  the 
manufacturers'  associations  and  the  dealers'  organizations  has 
always  been  a  marked  characteristic  of  their  work. 

Organization  or  Manufacturers. — ^The  National  Implement  & 
Vehicle  Association  was  organized  in  January,  1911,  as  a  consolida- 
tion of  the  National  Association  of  Agricultural  Implement  &  Ve- 
hicle Manufacturers,  the  National  Wagon  Manufacturers'  Avia- 
tion, the  National  Plow  Association,  and  the  National  Association 
of  Grain  Drill  Manufacturers.  The  merger  of  these  associations  was 
largely  due  to  the  common  interest  of  all  branches  of  the  industry  in 
questions  relating  to  raw  materials,  labor,  transportation,  legislation, 
retail  distribution,  etc.,  and  to  recognition  that  certain  phases  of  these 
questions  could  be  handled  most  effectively  and  most  economically  by 
a  single  association  representing  the  entire  industry. 

The  executive  committee  in  general  charge  of  the  association's 
activities  has  large  powers.  The  immediate  supervision  of  the  work 
is  in  the  hands  of  the  secretary  and  general  manager,  who  devotes  his 
entire  time  to  it.  Standing  committees  consider  and  report  on  the 
more  important  divisions  of  the  work.  The  sales  managers  of 
various  members  are  onganized  in  a  department  to  promote  harmoni- 
ous relations  between  the  salesmen  of  the  different  manufacturers 
and  to  improve  conditions  in  the  retail  trade.    (See  Exhibit  9.) 

Special  trade  departments  *  of  the  association,  which  have  their  own 
officers,  continue  the  work  of  the  old  wagon,  plow,  and  grain  drill 
associations  *  in  matters  of  special  interest  to  members  in  those  lines. 
The  most  important  matters  to  which  these  departments  give  atten- 
tion relate  to  conditions  arising  from  competition  between  members. 
The  secretary  and  general  manager  of  the  association  takes  an  active 
part  in  the  affairs  of  these  departments.  The  executive  committee  of 
the  association  also  maintains  some  supervision  over  their  activities. 

The  National  Implement  &  Vehicle  Association  is  incorporated 
under  the  laws  of  Illinois  as  an  association  not  for  profit.  Its  mem- 
bers are  divided  into  three  classes.  Active  members  of  the  first  class 
are  manufacturers  of  agricultural  implements,  vehicles,  and  allied 

1  Tlie  membership  of  these  departments  Is  shown  In  Exhibits  6,  7,  and  8. 

"Efforts  to  induce  the  Natiooal  Association  of  Thresher  Manufacturers  to  become  part 
of  the  National  Implement  &  Vehicle  Association  when  that  association  was  organized,  in 
January  1911,  were  unsuccessful.  However,  some  of  the  principal  thresher  manufac- 
turers belong  to  both  associations,  and  the  organization  of  a  special  thresher  depart- 
ment in  the  Nation*!  Implement  &  Vehicle  Association  has  been  considered.  The  organl- 
tttion  of  departments  for  carriage  manufacturers  and  gas-engine  manufacturers  has  also 
been  proposed.  Probably  because  of  the  existence  of  independent  associations  in  these 
three  branches,  none  of  these  departments  has  yet  been  organized. 


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lines.  Active  members  of  the  second  class  are  engaged  m  the  whole- 
sale distribution  of  these  products,  but  not  in  their  manufacture. 
Associate  members  are  manufacturers  of  materials  and  supplies  pur- 
cha^d  by  implement  manufacturers.  Keceipts  of  the  association  in 
1914,  based  in  part  on  an  estimate  of  the  treasurer  in  October, 
amounted  to  about  $28,000,  derived  almost  wholly  from  dues.^  The 
regular  income  of  the  special  trade  departments  is  nommal;  each 
members  pays  small  annual  dues.  „      .  .,  * 

Active  members  of  the  second  class  are  entitled  to  all  privileges  of 
members  of  the  first  class  except  that  they  may  not  vote  at  elections 
or  hold  office.  Associate  members  are  entitled  to  all  social  privileges 
of  the  association,  and  to  attend  all  general  meetings  except  those  of 
an  executive  character.  They  are  not  entitled  to  vote.  They  usually 
provide   entertainment   at  the   annual   conventions   of   the   active 

members."  , ,  .     ^  ^  i        ^       u 

The  annual  meeting  of  the  association  is  held  m  October  of  each 
year.  At  this  meeting  are  read  the  reports  of  officers,  the  executive 
committee,  and  the  standing  committees,  as  well  as  a  report  of  the 
attorneys  of  the  association.  These  reports,  which  are  submitted  to 
the  executive  committee  before  being  read,  present  a  summary  of  the 
various  phases  of  the  association's  activities  during  the  preceding  year, 
with  recommendations  for  future  work.  This  work  is  determined 
largely  by  resolutions  incorporating  the  recommendations  of  the  van- 
ous  committees.  The  various  matters  touched  upon  in  the  resolutions 
are  referred  to  the  secretary  or  proper  committee  for  action,  or  for 

report  to  the  executive  committee.^ 

Meetings  of  the  executive  committee,  the  standing  committees,  and 
of  the  special  trade  departments  are  held  from  time  to  time  durmg 
the  year.  Members  are  kept  advised  in  regard  to  matters  of  current 
interest  by  means  of  bulletins  and  circular  letters  issued  by  the  secre- 
tary and  general  manager  at  frequent  intervals.  Matters  that  are  of 
common  interest  to  members  requiring  legal  advice  are  referred  to 
the  attorneys  of  the  association.  .  .«   xu 

Jobbers'  clubs.— Wholesalers,  including  representatives  of  the 
branch  houses  of  the  manufacturers  and  of  other  competing  whole- 
sale concerns  at  the  different  jobbing  centers,  have  organized  clubs, 
through  which  the  members  may  cooperate  in  remedying  unsatis- 
factory conditions  of  common  interest.  Some  of  these  clubs  have 
now  had   fairly   successful  careers  covering  over   a  quarter   of   a 

iThP  scale  of  dues  paid  by  the  different  classes  of  members  is  shown  in  Exhibit  1. 

.The  "foreword''  of  a  directory  of  the  associate  members,  published  by  the  association 
1„  1913  contains  the  following :  "  This  directory  of  our  associate  members  and  their 
war^aiso  carries  with  It  the  suggestion  that  our  active  members  give  special  considera- 
tion to  these  concerns  in  the  making  of  contracts  and  the  placing  of  orders. 

•  The  resolutions  adopted  at  the  convention  held  in  October.  1914.  are  shown  elsewhere. 
(See  Exhibit  32,  p.  349.) 


4  FABM-MAOHINEBT  TBADE  ASSOCIATIONS. 

century.  Jobbers'  clubs  of  considerable  importance  have  been 
organized  in  Kansas  City,  Omaha,  Minneapolis,  Baltimore,  Des 
Moines,  Peoria,  St.  Louis,  Sioux  Falls,  and  Dallas. 

There  is  no  national  organization  of  the  jobbers'  clubs.  This  is 
probably  due  to  the  fact  that  the  work  of  each  club  relates  chiefly  to 
conditions  peculiar  to  its  own  market.  Provision  has  been  made,  as 
already  noted,  to  admit  wholesalers  to  limited  membership  in  the 
National  Implement  &  Vehicle  Association.  Few  have  thus  far 
become  members. 

Organization  among  dealers. — ^The  National  Federation  of  Im- 
plement &  Vehicle  Dealers'  Associations  is  composed  of  delegates 
from  State  and  interstate  associations  of  dealers.  The  aggregate 
membership  of  these  associations  is  claimed  to  exceed  5,000  dealers. 
They  constitute  probably  about  one-fourth  of  the  retailers  regularly 
engaged  in  the  trade  in  the  principal  grain-raising  States,  where 
nearly  all  these  associations  are  located,  and  in  some  of  these  States 
the  proportion  is  larger.  Besides  the  Federation  and  its  constituent 
associations  numerous  local  clubs  have  been  organized,  composed  of 
dealers  who  are  in  competition  with  each  other  in  the  same  locality. 
The  constituent  associations  have  for  several  years  pushed  the  organi- 
zation of  these  local  clubs  under  the  direction  of  the  Federation. 
This  work  has  been  encouraged  and  given  financial  assistance  by  the 
National  Implement  &  Vehicle  Association. 

The  object  of  the  Federation,  as  stated  in  its  constitution,  is  "  to 
supply  its  constituent  associations  and  their  members  with  any  and  all 
legal  and  proper  information  which  may  legitimately  come  into  its 
possession  and  which  may  be  of  interest  or  value  to  the  same." 

The  Federation  enables  its  constituent  associations  to  coordinate 
their  activities  along  similar  lines,  such  as  collecting  and  disseminat- 
ing information,  promoting  favorable  legislation  and  opposing  meas- 
ures adverse  to  dealers,  and  encouraging  the  formation  of  local  clubs 
of  dealers  for  the  general  education  of  the  trade  in  the  cost  of  doing 
business  as  a  means  of  preventing  price  cutting.  It  brings  the  com- 
bined influence  of  the  constituent  associations  to  bear  on  the  settle- 
ment of  differences  between  manufacturers  and  dealers  in  regard  to 
trade  policies  and  practices  objected  to  by  the  dealers.* 

Each  constituent  association  of  the  Federation  is  entitled  to  repre- 
sentation at  meetings  of  that  organization  on  the  basis  of  one  delegate 
for  each  100  members  or  fraction  thereof  exceeding  50.  Its  affairs 
are  managed  by  an  official  board,  consisting  of  the  president,  vice 
president,  and  secretary-treasurer,  and  six  directors.  The  three 
officers  first  named  constitute  an  executive  committee  authorized  to 
perform  the  duties  of  the  official  board  between  meetings  of  the 


V 


4 


Jb:  ' 


1  Begarding  tlie  actiTitiei  of  dealers'  organlsatioiu,  Me  Bzhiblt  31,  p.  337. 


ORGANIZATION   AND  DEVELOPMENT  OF   ASSOCIATIONS. 


§ 


latter.  It  is  the  duty  of  the  secretary  to  receive  and  file  infor- 
mation transmitted  to  the  Federation  by  and  through  its  members. 
It  is  also  his  duty  to  issue  to  constituent  associations  and  their  mem- 
bers a  bulletin  quarterly  or  as  often  as  the  official  board  may  decide. 
It  has  also  been  customary  for  the  Federation  to  recommend  topics 
to  be  discussed  at  conventions  of  the  constituent  associations.  The 
Secretaries'  Association  of  the  National  Federation,  organized  in 
October,  1913,  took  over  certain  detail  work  of  the  Federation,  such 
as  arranging  programs  for  constituent  associations. 

State  and  interstate  associations  are  organized  under  articles  of 
association  recommended  by  the  Federation.  Under  these  articles 
4^  any  dealer  having  a  regular  established  place  of  business,  carrying 
an  assorted  stock  of  implements,  vehicles,  or  hardware,  reasonably 
commensurate  with  the  demands  of  his  locality,  is  eligible  to  mem- 
bership. The  affairs  of  these  associations  are  subject  to  the  control 
of  a  board  of  directors.  An  executive  committee  composed  of  the 
president,  vice  president,  and  secretary-treasurer  passes  on  questions 
of  importance  to  the  association  between  sessions  of  the  board.  Close 
relations  exist  between  these  associations  and  the  jobbers'  clubs. 

A  meeting  of  the  members  of  each  association  is  held  annually,  at 
which  the  reports  of  officers  and  committees  are  read  and  discussed. 
These  reports,  especially  that  of  the  secretary-treasurer,  review  the 
activities  of  the  association  for  the  preceding  year  and  make  recom- 
mendations for  future  work.  These  reports  are  usually  referred  to 
the  committee  on  resolutions  for  use  in  framing  resolutions  defining 
the  attitude  of  the  members  on  matters  affecting  their  trade. 

The  suppression  of  price  cutting  and  the  improvement  of  local 
trade  conditions  generally  is  the  particular  field  of  the  local  clubs. 
Their  object,  as  stated  in  uniform  articles  of  association  recommended 
by  the  Federation,  is  "  social  enjoyment  and  entertainment,  together 
with  such  benefits  in  a  business  way  as  will  naturally  be  brought 
about  by  a  feeling  of  fraternity  and  good  fellowship  among  its 
membership." 

These  articles  provide  for  the  definition  of  the  territory  within 
which  dealers  are  eligible  for  membership;  the  qualifications  for 
membership  are  the  same  as  for  the  State  associations. 

A  dealer  in  applying  for  membership  agrees  to  abide  by  all  the 
rules  and  regulations  which  have  been  adopted  for  the  government 
of  the  club,  and  also  such  rules  and  regulations  as  may  subsequently 
be  adopted.  Provision  is  made  for  the  expulsion  of  a  member  by  a 
majority  vote  or  for  withdrawal  on  surrender  of  membership  card. 
Any  member  going  out  of  business  is  considered  to  have  withdrawn. 

The  officers  provided  for  consist  of  a  president,  vice  president,  and 
secretary-treasurer,  who  ex  officio  constitute  an  executive  committee. 
Standing  committees  on  entertainment,  grievances,  and  credits  and 


i 


VABM'MAOHINEBT  TRADE  ASSOCIATIONS. 


collections  are  also  mamtained.  The  grievance  committee  is  ex- 
pected to  investigate  and  adjust  any  difference  arising  between  mem- 
bers of  the  club.  It  is  the  duty  of  the  committee  on  credits  and 
collections  to  devise  and  submit  plans  to  promote  the  interests  of 
members  in  respect  to  credit  and  collection  matters. 

Sietioii  2.  The  deTelopment  of  anoeiatioiii. 

The  farm-machinery  trade  reached  the  degree  of  organization  de- 
scribed in  the  previous  section  only  after  some  30  years  of  associa- 
tiim  effort.  A  general  account  of  conditions  in  the  trade  that  gave 
lise  to  the  association  movement,  of  different  organizations  that 
have  taken  part  in  that  movement,  and  of  the  nature  of  their  early 
activities  is  necessary  to  a  full  appreciation  of  the  work  done  in 
later  years  described  in  the  succeeding  chapters, 

Syotem  of  distribution.— As  the  implement  industry  developed 
and  it  became  profitable  to  seek  a  wider  market,  many  manufac- 
turers found  it  desirable  to  form  connections  with  jobbing  houses 
at  the  wholesale  centers.  These  jobbers,  by  buying  from  different 
manufacturers,  obtained  machines  in  demand  throughout  the  year. 
They  were  thus  able  to  employ  their  selling  force  more  economically 
than  the  manufacturer  whose  output  was  small  or  in  demand  for 
only  a  few  months  in  the  year.  Because  of  the  large  capital  re- 
quired, these  jobbers  did  not  often  handle  threshers  and  bmders, 
which  werj  sold  by  the  manufacturers  themselves  through  general 
agencies  located  at  wholesale  distributing  centers. 

The  larger  and  more  aggressive  plow  manufacturers,  possibly  be- 
cause their  products  are  in  demand  so  large  a  part  of  the  year, 
established  branch  houses  at  the  most  important  wholesale  centers. 
They  also  added  other  lines,  until  now  most  implements  not  sold  by 
the  binder  and  thresher  companies  are  handled  by  branch  houses 
of  the  tillage-implement  manufacturers.  Some  of  the  branch  houses 
were  owned  jointly  by  noncompeting  interests— plow,  wagon,  and 
seeder  manufacturers,  for  example.  This  plan  did  not  prove  satis- 
factory Usually  the  plow  mterests  took  over  the  whole  enterprise, 
sometimes  continuing  to  job  the  products  of  their  former  partners. 
On  the  whole,  manufacturers  have  secured  a  constantly  mcreasmg 
degree  of  control  over  the  facilities  of  distributing  their  products. 

As  the  demand  for  farm  machinery  increased,  its  retail  sale  became 
of  sufficient  importance  to  be  recognized  as  a  distinct  vocation.  In 
most  small  towns  in  agricultural  districts,  the  sale  of  farm  equip- 
ment and  aUied  Imes  was  a  profitable  business  for  at  least  one  man. 
There  were  few  towns  where  the  business  was  large  enough  to  sup- 
port more  than  three  dealers  satisfactorily.  Moreover,  these  dealers 
did  not  find  it  profitable  to  handle  more  than  one  or  two  makes  of 


^ 


^  !  '# 


^ 


OBGANIZATION   AND  DEVELOPMENT  OF  ASSOCIATIONS.  7 

any  particular  kind  of  machine.  Under  these  conditions  all  the 
machines  sold  by  the  regular  implement  dealers  in  any  one  town  were 
made  by  a  relatively  small  number  of  manufacturers.  When  ma- 
chines made  by  other  manufacturers  were  sold,  the  sales  were  made 
directly  to  the  farmer  himself,  or  through  some  one  not  engaged  in 
the  implement  business  as  a  regular  dealer. 

In  addition  to  the  limited  number  of  regular  implement  dealers  in 
a  given  locality,  the  large  amount  of  capital  required  to  handle 
threshers,  binders,  and  other  expensive  machinery  has  frequently 
made  it  difficult  for  manufacturers  in  these  lines  to  find  satisfactory 
local  agents.  Indeed,  the  thresher  manufacturers  have  for  years 
made  a  large  proportion  of  their  sales  directly  to  the  farmer  or  job 
thresherman,  paying  the  local  dealer  a  commission  when  he  assists  in 
making  a  sale.  Local  agents  handle  binders,  but  almost  always  on  a 
commission  contract,  and  are  often  assisted  by  the  manufacturer's 
canvassers,  experts,  and  collectors.  Wagons,  manure  spreaders,  and 
other  somewhat  expensive  implements  are  sometimes  sold  on  commis- 
sion, but  more  often  on  such  long  time  that  the  economic  relations 
between  the  dealer  and  the  manufacturer  are  practically  the  same. 
Furthermore,  the  sales  contracts  used  by  the  big  plow  houses  leave 
title  in  the  seller  until  payment,^  and  often  provide  that  credit  on 
unsold  goods  shall  extend  into  the  next  season. 

Under  the  system  of  distribution  in  the  farm-machinery  trade 
outlined  above,  except  where  monopolistic  conditions  of  manufac- 
ture appeared,  the  business  was  peculiarly  open  to  severe  competition 
in  prices  or  terms.  In  other  industries,  where  the  entire  output  of  a 
manufacturer  is  taken  by  the  jobbing  trade,  the  temptation  to  cut 
both  wholesale  and  retail  prices  is  probably  less  continuous  and  less 
urgent  than  for  the  implement  manufacturer,  whose  salaried  em- 
ployees and  agents  are  called  on  to  make  prices  on  thousands  of 
individual  sales  throughout  the  season.  So,  also,  there  is  no  such 
inducement  to  make  concessions  in  other  industries  in  which  the 
capital  required  in  distribution  is  smaller  and  in  which  it  is  not 
necessary  to  employ  so  many  trained  and  experienced  men.  Fur- 
thermore, in  few  trades  of  such  importance  are  there  so  many  retail 
dealers  who  enter  the  business  without  special  training  and  who,  at 
the  close  of  each  season,  are  so  ready  to  close  out  their  business 
and  realize  on  their  entire  investment  by  a  price-cutting  campaign. 

An  important  counteracting  influence  is  found,  however,  in  the 
fact  that  the  goods  are  almost  entirely  articles  having  a  brand  name 
and  established  custom.  In  building  up  this  custom  the  dealer  plays 
an  important  part,  and  it  is  to  his  interest  to  keep  the  agency  of  the 
lines  he  has  promoted  and  to  prevent  any  excessive  price  cutting 


» The  use  of  the  so-called  "  title  "  clause  in  agency  contracts  with  dealers  is  referred  to 
elsewhere.     (See  p.  80.) 


FAKM-MACHINEBY  TRADE  ASSOCIATIONS. 


"!> 


^       (I 


therein.  In  some  lines  of  implements,  moreover,  the  prestige,  or  the 
monopoly  position  of  certain  manufacturers,  is  so  great  that  they  can 
almost  always  obtain  the  best  dealers  and  discontinue  business  with 
those  who  are  less  desirable.  They  are  able  not  only  to  fix  their 
wholesale  prices  but  also  to  exert  a  strong  influence  on  the  retailer 
with  respect  to  the  prices  at  which  the  goods  shall  be  sold  to  the 

farmer. 

Both  the  competitive  and  the  monopolistic  factors  in  the  industry 
have,  in  different  ways,  contributed  to  a  certain  instability  in  the 
business  and  have  had  an  influence  in  inducing  the  formation  of 
trade  associations. 

Associations  or  manufacturers. — ^The  National  Wagon  Manu- 
facturers' Association  was  the  first  trade  organization  of  any  con- 
siderable importance  in  the  farm-machinery  industry.  Its  records 
give  an  account  of  a  meeting  as  early  as  December,  1879.  There 
were  a  number  of  meetings  in  1880,  but  disagreements  in  regard  to 
price  policy  soon  developed,  and  the  records  show  only  one  meeting 
in  the  years  1881-1885.  Several  meetings  were  held  in  1886  and 
1887,  this  period  of  activity  ending  in  an  attempt  to  form  a  pool. 
Annual  meetings  were  resumed  in  1891  and  have  been  held  regularly 

since  that  year. 

Manufacturers  of  threshing  machinery  met  to  discuss  credits  to 
purchasers  in  1884  and  1885,  and  organized  an  association  in  1888. 
Manufacturers  of  binders  met  at  Chicago  in  September,  1885,  and 
discussed  the  price  situation.  The  attitude  of  a  single  company 
defeated  all  attempted  agreements.  A  similar  attempt  failed  in 
January,  1888,  because  one  company  objected  to  the  arrangement 
for  enforcing  agreements.  Efforts  to  cooperate  for  mutual  ad- 
vantage were  also  made  by  manufacturers  of  com  planters  in  1887, 
pumps  in  1888,  hay  presses  in  1889,  and  binder  twine  in  1890.  In 
July,  1899,  a  meeting  of  grain-drill  manufacturers  held  in  Chicago 
indorsed  an  advance  of  15  per  cent  in  wholesale  prices.  No  associa- 
tion appears  to  have  been  formed  until  June,  1902,  when  representa- 
tives of  a  number  of  the  factories  met*  and  organized  the  National 
Association  of  Grain  Drill  Manufacturers. 

During  the  eighties  several  associations  of  plow  manufacturers 
were  organized.  All  were  shortlived  except  the  Northwestern  Plow 
Association,  which  was  organized  in  1887.  That  association  met 
occasionally  during  the  nineties.  In  June,  1899,  the  name  was 
changed  to  the  Northwestern  Plow  &  Implement  Association,  and 
manufacturers  of  com  planters,  disc  and  lever  harrows,  and  culti- 
vators were  invited  to  join.  Failure  of  efforts  to  establish  standard 
prices  appears  to  have  caused  the  members  to  lose  interest  in  the 
association.   It  is  claimed  that  few,  if  any,  meetings  were  held  after 


*     '\ 


<« 


% 


«j 


1 


^    ' 


ORGANIZATION  AND  DEVELOPMENT  OF  ASSOCIATIONS.  9 

1903  and  that  the  association  had  virtually  passed  out  of  existence 
in  1907,  when  the  National  Plow  Association  was  formed. 

No  organization  of  manufacturers  to  cover  the  whole  implement 

1^  field  was  attempted,  apparently,  until  the  early  part  of  1894,  when 

the  representatives  of  some  20  prominent  concerns  in  various  branches 
of  the  industry  met  at  Chicago  and  organized  the  National  Associa- 
tion of  Agricultural  Implement  &  Vehicle  Manufacturers  to  attend  to 
matters  of  common  interest.  Although  the  implement  trade  at  that 
time  was  suffering  from  an  overproduction  of  machines  following  a 

^  falling  off  in  the  demand  on  account  of  the  crisis  of  1893,  no  attempt 

appears  to  have  been  made  to  restrict  the  output  of  the  different 
^  ^      members  nor  to  influence  the  prices  and  terms  of  their  sales. 

To  reduce  the  expenses  of  membership  in  two  or  more  organiza- 
tions and  to  secure  a  greater  degree  of  uniformity  by  vesting  control 
of  common  interests  in  a  single  association,  a  consolidation  of  several 

A,  of  the  principal  associations  was  proposed  in  1909.     When  this 

proposition  was  first  made  some  opposition  developed  among  mem- 
bers of  the  plow  and  wagon  associations,  who  feared  that  if  the  plan 
should  be  carried  out  it  would  limit  the  effectiveness  of  their  work. 

/  The    plan    of    organizing    special    departments    for    the    different 

branches  of  the  trade  appears  to  have  met  this  objection,  and  the 

f-  National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 

facturers,  the   National    Wagon    Manufacturers'    Association,    the 
National  Plow  Association,  and  the  National  Association  of  Grain 
Drill  Manufacturers  were  reorganized  as. the  National  Implement  & 
Vehicle  Association  in  January,  1911. 
State   and   interstate   associations   of   dealers. — ^During   the 

'♦  eighties  attempts  were  made  here  and  there  to  organize  the  dealers 

for  the  improvement  of  conditions  in  the  retail  implement  trade. 
The  most  ambitious  of  these  was  a  convention  of  the  "  Retail  Imple- 
ment Dealers'  Association  of  the  West  and  Northwest,"  held  in 

J  Chicago  in  September,  1885.    This  association  failed  to  obtain  desired 

cooperation  from  the  binder  manufacturers  and  apparently  never 

#  held  a  second  meeting.     In  the  same  way  nothing  further  is  heard 

of  the  Implement  Dealers'  Association  of  Northern  Iowa,  after  a 
meeting  at  which  its  members  assented  to  a  schedule  of  retail  prices 
prepared  early  in  1886. 

Hardly  three  years  later,  however,  an  association  was  organized 
which,  since  1888,  has  steadily  promoted  the  interests  of  the  retail 

1^  implement  trade.    A  meeting  of  a  few  dealers  was  held  at  Kansas 

City  in  the  fall  of  1888,  and  as  a  result,  in  February,  1889,  the  asso- 
ciation of  Kansas  Retail  Implement  Dealers  was  organized.  Two 
years  later,  having  admitted  members  from  other  parts  of  the 
Kansas  City  jobbing  territory,  most  of  whom  were  located  in  Mis- 


10 


FARM-MACHINEBY  TRADE  ASSOCIATIONS. 


souri,  its  name  was  changed  to  "The  Western  Retail  Implement 
Dealers'  Association,"  and  later  the  word  "Vehicle"  was  added. 
Since  January,  1914,  it  has  been  the  Western  Retail  Implement, 
Vehicle  &  Hardware  Association.  In  1889  there  were  about  20 
members;  in  the  fall  of  1913  about  1,600. 

In  other  sections  of  the  country  the  early  efforts  of  the  dealers  to 
cooperate  through  associations  were  not  so  successful.  For  example, 
a  dealers'  association  in  the  Red  River  Valley  of  Minnesota  and 
North  Dakota  was  reported  to  be  making  a  success  of  cooperative 
buying  in  1889,  but  nothing  further  is  heard  of  it.  The  Northwest- 
em  Implement  Dealers'  Association  was  organized  in  St.  Paul,  Minn., 
in  1889,  and  in  the  early  nineties  State  and  interstate  associations 
were  organized  in  Illinois,  Iowa,  Ohio,  Pennsylvania,  New  York, 
Michigan,  Wisconsin,  Nebraska,  and  Missouri.  Some  of  these  were 
very  active  for  a  time,  but  most  of  them  accomplished  very  little. 

Smaller  associations  continued  to  be  organized— a  district  asocia- 
tion  in  northeastern  Nebraska  in  1894;  one  in  North  Dakota  and  one 
in  southeastern  Nebraska  in  1895;  one  in  northern  Iowa  in  1897,  and 
another  in  1898;  one  in  Montana  in  1899;  and  one  in  southern 
Nebraska  about  1900.  Toward  the  end  of  the  nineties  it  became 
clear  that  the  Western  association  had  demonstrated  that  there  was  a 
field  of  work  in  which  State  and  interstate  associations  could  be  per- 
manently successful.  It  is  a  matter  of  no  surprise,  therefore,  that 
about  that  time  the  dealers  organized  or  became  more  active  in  Ohio, 
Indiana,  Illinois,  Kentucky,  Minnesota,  Nebraska,  Iowa,  North 
Dakota,  South  Dakota,  and  Texas. 

The  most  notable  step  in  the  organization  of  the  retail  trade  was 
taken  in  1900,  when  the  National  Federation  of  Implement  & 
Vehicle  Dealers'  Associations  was  established.  Delegates  from  the 
Western  association,  Illinois  Retail  Implement  Dealers'  Association, 
Iowa  Implement  &  Vehicle  Dealers'  Association,  the  Nebraska  & 
Western  Iowa  Implement  Dealers'  Association,  and  Retail  Imple- 
ment Dealers'  Association  of  South  Dakota,  Southwestern  Minnesota 
&  Northwestern  Iowa  met  in  Chicago  September  21,  1900,  to  form 
a  central  organization  to  represent  the  general  interests  of  the  various 
State  and  interstate  associations.  The  estimated  membership  of  the 
associations  represented  in  1901  was  about  2,000  dealers. 

In  October,  1913,  the  Federation  represented  the  16  associations^ 
lliven  below : 

Western  Retail  Implement  &  Vehicle  Dealers'  Association. 

Iowa  Implement  Dealers'  Association. 

Tri-State  Vehicle  &  Implement  Dealers'  Association. 

»At  tlie  last  annual  convention.  In  October.  IftU.  representatlvea  were  present  from 
two  other  aasociatlons,  namely,  the  Pacific  Northwest  Hardware  4  Implement  AaaociaUoo 
and  the  Montana  Implement  Dealers'  Association. 


OBGANIZATION  AND  DEVELOPMENT  OF  ASSOCIATIONS. 


11 


# 


i'^\ 


0 

1^ 

A 

^ 

r 

% 

P' 

•* 

w 

^ 

f 

^' 


>i  »^ 


Michigan  Retail  Implement  &  Vehicle  Dealers'  Association. 

Minnesota  Retail  Implement  Dealers]  Association. 

Texas  Hardware  &  Implement  Association. 

Illinois  Retail  Implement  Dealers'  Association. 

Wisconsin  Retail  Implement  &  Vehicle  Dealers'  Association. 

Mid-West  Retail  Implement  Dealers'  Association. 

Retail  Implement  Dealers'  Association  of  South  Dakota, 
Southwestern  Minnesota  &  Northwestern  Iowa. 

Colorado  Retail  Hardware  &  Implement  Association. 

The  Mississippi  Valley  Implement  &  Vehicle  Dealers  Asso- 
ciation, -r        1  J.  T-W     1        7 

North  Dakota  &  Northwestern  Minnesota  Implement  Dealers 
A-Ssociation. 

Virginia  &  North  Carolina  Retail  Implement,  Machinery  & 
Vehicle  Dealers'  Association. 

New  York  State  Retail  Implement  &  Vehicle  Dealers  Asso- 
ciation. O     TT  I.-   1 

Pennsylvania  &  New  Jersey  Retail  Implement  &  Vehicle 
Dealers'  Association. 

Their  combined  membership  amounted  to  over  5,000  dealers. 

Local  clubs.— Local  clubs  developed  more  slowly  than  the  State 
and  interstate  associations.  As  early  as  1896  the  Western  associa- 
tion recognized  the  importance  of  such  organizations.  Later,  sev- 
eral State  associtions  undertook  to  establish  local  clubs  to  deal  with 
local  competitive  conditions,  especially  the  matter  of  prices.  In 
October,  1907,  it  was  reported  to  the  National  Federation  that  the 
movement  had  not  been  as  general  as  had  been  hoped  for.  In  recent 
years,  however,  the  development  of  the  cost  educational  movement 
has  been  attended  by  a  vigorous  growth  of  local  clubs.     (See  pp. 

218-243.) 

Recently  a  number  of  district  associations  have  been  formed  as 
branches  of  State  or  interstate  associations  among  dealers  in  south- 
em  Michigan,  central  Michigan,  northwestern  Ohio,  and  northern 
Illinois.  They  assist  in  the  work  of  the  larger  associations,  and  also 
of  the  local  clubs  in  the  same  territory. 

Section  3.  Early  activities  of  associations. 

To  enhance  the  profits  of  their  members  is  the  prime  motive  of  trade 
associations.  Fixing  a  satisfactory  price  seems  an  easy  way  to  solve 
the  problem.  It  is  not  surprising,  therefore,  that  a  proposed  advance 
of  25  per  cent  in  the  wholesale  price  of  farm  wagons  December  16, 
1879,*  is  the  first  notable  item  found  in  implement-association  records. 
In  September,  1885,  the  Retail  Implement  Dealers'  Association  of  the 
West  &  Northwest,  just  organized  (see  p.  9),  asked  the  harvesting- 

■  ' 

lOn  the  above  date  the  National  Wagon  Manufacturers'  Association  advanced  the  price 
of  the  standard  farm  wagon  from  $52  to  $65.  In  February,  1880,  there  was  another 
advance  but,  on  reports  of  retail  sales  at  $75  and  of  new  manufacturers  starting  up,  the 
price  was  reduced  In  May.  Soon  afterwards  the  leading  concern  asserted  its  Intention  to 
make  its  own  prices. 


12 


FABM-MACHINBBY  TRADB  ASSOCIATIONS. 


machine  manufacturers  to  fix  the  retail  prices  of  binders,  which  were 
regarded  as  being  abnormally  low,  and  to  make  the  dealers  forfeit  their 
commission  on  all  sales,  if  they  cut  these  prices.  The  binder  manu- 
facturers failed  to  grant  the  requests  of  the  dealei-s.  However,  at  that 
time  and  later  the  commission-agency  contracts  of  some  companies 
fixed  the  ntail  price  which  the  dealer  was  supposed  to  maintain  un- 
der the  terms  of  his  contract  In  the  same  year  the  Northwestern 
Plow  &  Cultivator  Association  was  said  to  have  checked  the  alleged 
"ruinous"  downward  course  of  prices  in  their  products.*  In  May, 
1886,  the  Implement  Dealers'  Association  of  Northern  Iowa  agreed 
on  a  schedule  of  prices  for  various  machines. 

In  1886  and  1887  the  members  of  the  National  Wagon  Manufac- 
turers' Association  attempted  to  form  a  pool.  Production  in  excess 
of  an  allotted  proportion  was  to  be  penalized.  In  the  fall  of  1887  the 
Northwestern  Plow  Association  was  hoping  to  relieve  the  situation 
by  cutting  down  the  output  of  its  members,  and  it  was  reported  in 
October  of  that  year  that  uniform  prices  at  a  slight  advance  had  been 
established.  Apparently,  the  association  secured  a  temporary  im- 
provement in  the  situation,  but  in  the  fall  of  1888  the  failure  of  the 
association  to  "restore"  prices  was  ascribed  to  the  refusal  of  the 
smaller  manufacturers  to  adhere  to  association  prices  and  the  conse- 
quent general  violation  of  association  rules. 

Apparently,  associations  of  implement  manufacturers  have  never 
attempted  to  exclude  competitors  as  a  means  of  restricting  competi- 
tion in  prices.  As  early  as  1885,  however,  the  regular  retail  imple- 
ment dealer  had  become  convinced  that  profits  could  be  protected 
only  by  excluding  irregular  competition— that  of  the  blacksmith,  the 
general  storekeeper,  the  grain-elevator  man,  and  the  farmer-agent. 
This  is  shown  in  one  of  the  suggestions  of  the  Retail  Implement 
Dealers'  Association  of  the  West  &  Northwest  to  the  binder  manu- 
facturers in  that  year,  which  reads  as  follows: 

Do  not  sell  or  appoint  as  agent  any  person  who  is  not  a  legiti- 
mate implement  dealer.* 
It  does  not  appear,  however,  that  anything  was  accomplished  at 

that  time. 

Association  efforts  similar  to  those  noted  continued  intermittently 
throughout  th6  decade,  but  they  did  not  prevent  a  large  reduction  in 
implement  prices  from  1880  to  1890.  Lower  prices  were  the  result 
of  cheaper  raw  materials,  improved  manufacturing  processes,  larger 
output  by  individual  concerns,  and  energetic  competition  among 
manufacturers.  Moreover,  the  machines  were  being  improved  from 
year  to  year.    The  following  prices  for  machines  at  Fort  Dodge, 

ipiow  mannlartiirerB  In  other  sectlong  of  tbe  country  were  working  along  the  same 

Ilnea. 
•A  UmltatkMi  of  the  output  wai  also  urged. 


OEGANIZATION  AND  DEVELOPMENT  OF  ASSOCIATIONS. 


13 


^ 


')% 


m 


«.         4 


# 


^    I 


Iowa,  are  believed  to  be  representative  of  the  decline  referred  to 
above:  Binders  sold  for  $315  in  1880  and  for  $130  in  1890;  14:-inch 
walking  plows  for  $28  in  1880  and  $14  in  1890;  standard  farm 
wagons  for  $85  in  1880  and  $50  in  1890.  The  decline  in  the  average 
price  of  10  implements  in  general  use  was  over  50  per  cent. 

While  efforts  to  raise  prices  were  predominant  in  early  associa- 
tion work,  reductions  of  cost  were  by  no  means  entirely  neglected. 
An  expense  annoying  to  manufacturers  has  always  been  that  result- 
ing from  the  abuse  of  the  manufacturer's  warranty  by  customers. 
Modification  of  the  wagon  warranty  was  one  of  the  topics  discussed 
at  the  National  Wagon  Manufacturers'  Association  meeting  in  De- 
cember, 1879.  A  conference  of  southern  wagon  manufacturers  was 
called  in  April,  1888,  to  obtain,  if  possible,  a  reduction  of  the  wagon 
warranty  from  12  to  6  months.  It  was  claimed  in  1888  that  the 
Northwestern  Plow  Association  had  reduced  the  selling  costs  of  its 
members.  An  important  topic  in  the  discussions  of  the  thresher 
manufacturers'  association,  organized  in  1888,  was  methods  of 
reducing  losses  on  credits. 

The  organization  of  the  Western  Retail  Implement,  Vehicle  & 
Hardware  Association^  in  February,  1889,  was  in  part  for  the 
purpose  of  bringing  the  combined  influence  of  the  members  to  bear 
on  certain  "methods  adopted  by  the  Kansas  City  Association  of 
Implement  Dealers^  in  loading  goods."  The  association  expressed 
its  belief  that  these  methods  constituted  "  an  attempt  to  force  us  to 
buy  of  certain  manufacturers."  Transportation  questions  early  en- 
gaged the  attention  of  the  associations.  In  1893,  one  of  the  associa- 
tions cited  the  following  cause  of  complaint:  'The  inequality  of 
freight  rates  charged  by  railroad  companies,  and  the  very  great 
reluctance  manifested  by  said  railroad  companies  in  paying  for  goods 
damaged,  broken  or  lost  by  the  carelessness  of  their  employees." 

Proposed  changes  in  the  tariff  and  State  legislation  hostile  to  for- 
eign corporations  in  Michigan  appear  to  have  been  the  immediate 
reasons  for  the  organization  of  the  National  Association  of  Agri- 
cultural Implement  &  Vehicle  Manufacturers,  which  occurred  on 
April  18, 1894.  In  addition  to  questions  of  State  and  National  legis- 
lation and  litigation  in  matters  of  common  interest  to  its  members, 
the  association  at  once  turned  its  attention  to  transportation  and 
credit  problems.  The  scope  of  its  activities  increased,  and  that  of  its 
successor,  the  National  Implement  &  Vehicle  Association,  now  covers 
the  field  indicated  by  the  list  of  its  standing  committees.* 

iThen  the  Association  of  Kansas  Retail  Implement  Dealers. 

■  This  association  was  compof?ed  of  the  wholesale  dealers  or  jobbers  at  Kansas  City. 

•  The  list  of  standing  committees  in  1914  is  as  follows :  Advisory  committee  (composed 
of  former  presidents)  ;  agricultural  extension;  attorneys  and  litigation;  credits  and  col- 
lections; dealers'  associations;  foreign  commerce  and  tariff;  freight  transportation;  in- 
snrance;  manufacturing  costs;  membership;  National  legislation;  patents;  State  legis- 
lation; and  workmen's  accident  compensation. 


14 


FABM-MACHINERY  TBAOE  ASSOCIATIONS. 


It  is  evident,  therefore,  that  associations  in  the  farm-machinery 
trade  even  in  their  early  years  appreciated  the  importance  of  reduc- 
ing costs.  They  realized,  however,  that  cost  reduction  was  of  no 
value  without  maintenance  of  prices.  The  course  of  prices  has  always 
been  the  matter  of  first  concern  with  them.  It  is  desirable,  there- 
fore, before  attempting  further  consideration  of  their  activities  to 
review  some  of  the  characteristics  of  farm-machinery  prices. 

Variation  in  types  of  machines  and  their  equipment  as  made  by 
different  manufacturers  has  always  been  a  marked  characteristic  of 
the  farm-machinery  industry.  This  lack  of  a  common  type  has  ren- 
dered impossible  any  satisfactory  statistical  treatment  or  comparison 
of  prices.  Indeed,  it  has  been  impracticable  to  determine  what  should 
be  accepted  as  standard  types  of  wagons,  plows,  harrows,  binders, 
etc.,  even  for  a  single  season.  As  will  be  shown  later  in  Chapter  II, 
the  efforts  of  the  wagon  association  and  the  plow  association  to  secure 
standardization  of  the  products  of  their  members  have  been  both 
energetic  and  persistent  Their  purpose  is  evident.  The  desired  har- 
mony in  prices  could  not  be  secured  unless  there  was  some  way  of 
determining  the  actual  relation  existing  between  the  prices  of  differ- 
ent manufacturers. 

The  difficulties  in  the  way  of  establishing  a  standard  plow  are 
strikingly  illustrated  by  the  fact  that  as  late  as  1910  an  official  of  a 
leading  plow  concern  estimated  that  it  was  making  2,000  different 
styles  of  plow  bottoms.  Differences  in  equipment  interfere  with 
standardization  quite  as  often  as  difference  in  design.  For  example, 
in  1907  the  secretary  of  the  National  Plow  Association  was  endeavor- 
ing to  ascertain  from  the  members  which  of  nine  different  articles 
they  included  in  the  regular  equipment  of  their  gang  plows.  The 
great  variation  possible  in  the  equipment  of  farm  wagons  is  illus- 
trated by  the  list  of  extra  parts  shown  in  Exhibit  13,  page  266. 

Differences  in  design  and  equipment  are  baffling,  but  added  to  these 
are  the  frequent  changes  in  materials;  iron  or  steel  have  been  sub- 
stituted for  wood,  canvas  for  leather,  pressed  steel  for  malleable 

iron,  etc 

Another  marked  characteristic  of  the  business  has  been  the  manu- 
facturer's discrimination  in  prices  to  different  customere  and  in  dif- 
ferent localities.  Discrimination  almost  invariably  creeps  in  even 
under  circumstances  most  favorable  for  maintaining  uniform  prices 
to  different  customers.  It  may  appear  in  the  price  itself,  m  changed 
discounts,  in  special  service— canvassing,  exporting,  advertising, 
etc.— in  freight  allowances,  in  extra  parts,  or  in  extra  equipment. 
The  methods  are  too  numerous  to  mention  and  are  often  carefully 

concealed. 

Variations  in  prices  on  the  same  article  in  a  single  season  are 
doubtless  due  partly  to  the  uncertainty  of  the  manufacturer  or  dealer 


V* 


m 


\ 


4 


ORGANIZATION  AND  DEVELOPMENT  OF  ASSOCIATIONS. 


15 


in  regard  to  what  competitors  are  doing  and  partly  to  the  fact  that 
machines  left  on  hand  at  the  end  of  one  season  may  depreciate  in 
value  before  the  opening  of  the  next.  This  price  variation  may  be 
illustrated  by  the  retail  prices  of  farm  wagons  for  one  season.  The 
Bureau  found  retail  prices  for  3J-inch  skein  standard  wagons  in  1911, 
running  from  $60  to  $100.  The  prices  of  one  that  had  a  very  large 
sale  ranged  from  $65  to  $90,  while  another  leading  make  sold  in  one 
State  as  low  as  $62  and  in  an  adjoining  State  as  high  as  $85.  These 
figures  might  easily  convince  an  association  price  committee  that 
prices  had  not  been  satisfactorily  maintained. 

Such  conditions,  also,  make  it  difficult  to  determine  the  general 
price  level  for  a  given  season.  Although  satisfactory  statistical 
treatment  is,  therefore,  impracticable,  some  facts  in  regard  to  imple- 
ment prices  are  clearly  established.  The  very  great  decline  in  prices 
from  1880  to  1890  has  already  been  noted,  although  the  exact  extent 
is  difficult  to  determine.  Old  machines,  old  horses,  and  old  cows 
were  often  taken  in  trade  at  fictitious  values.  During  this  period  the 
6-foot  binder  was  sold  to  farmers  as  low  as  $65  in  some  instances, 
and  at  least  as  late  as  1888  as  high  as  $175.  In  August,  1890,  an 
implement-trade  paper  reported  that  binder  prices  had  never  been 
more  irregular  and  competition  never  more  reckless  than  in  that  year. 
In  June  of  the  same  year  it  reported  the  price  of  the  binder  in  the 
United  States  as  "about  $145."  Taken  altogether,  the  evidence  is 
convincing  that  the  average  retail  price  in  that  year  was  above  $100 
and  below  $130,  but  it  would  be  impossible  to  obtain  an  estimated 
average  worth  considering. 

This  uncertainty  of  prices  in  the  binder  business  largely  due  to  the 
manufacturers'  practice  of  contracting  with  irregular  dealers  (see 
p.  12),  seriously  affected  the  whole  implement  trade  and  for  years 
was  the  chief  concern  of  the  retail  dealers'  associations.  The  better 
class  of  dealers  had  always  been  bitter  against  the  use  of  the  binder 
manufacturers'  canvasser,  which  was  later  denounced  by  the  Western 
association  as  "  an  unnecessary  expense,  a  most  prolific  source  of  price 
cutting,  and  a  demoralization  of  trade,  not  in  keeping  with  good 
business  principles."  The  dealer  and  canvasser,  working  together, 
often  sold  at  lower  prices,  on  longer  terms,  and  to  poorer  credit  risks 
than  the  dealer  would  accept  when  working  alone.  The  attempts 
made  in  the  eighties  to  have  the  binder  manufacturers  fix  the  retail 
price  have  already  been  noted.  Later  some  of  the  leading  manufac- 
turers printed  retail  prices  in  their  contracts,  and  the  attempted  con- 
solidation of  binder  manufacturers  in  the  fall  of  1890  fixed  the  retail 
price  of  a  6-foot  binder  in  its  contracts  at  $135.  Nevertheless,  in 
January,  1892,  the  president  of  the  Western  association  said  that 
competition  had  brought  profits  so  low  that  in  many  cases  it  was  a 
question  how  long  the  dealer  could  hold  out. 


18 


FARM-MACHINEBY  TBADE  ASSOCIATIONS. 


In  view  of  these  conditions,  representatives  of  all  the  binder  manu- 
facturers, who  were  really  pushing  their  business  in  the  great  grain- 
growing  section,  met  in  Kansas  City  in  December,  1891.  As  the 
result  of  this  meeting  a  petition  was  forwarded  to  the  general  offices 
of  the  11  companies  represented,  asking  them  to  fix  the  wholesale  and 
retail  prices  of  their  products. 

In  January,  1892,  the  Western  association  of  dealers  adopted  the 
following  resolution: 

That  it  is  the  sense  of  the  meeting  that  the  wholesale  manufac- 
turers do  away  with  canvassers  and  agents  and  that  the  price 
given  to  these  agents  be  taken  from  the  price  of  the  implements 
and  given  to  the  retail  dealer,  and  that  the  manufacturer  through 
his  agent  will  cancel  any  contract  with  any  retail  dealer  that  is 
found  cutting  prices  during  the  season. 
In  the  same  year  the  chairman  of  the  Western  association's  har- 
Toeler  committee  wrote: 

What  we  desire  of  manufacturers  of  harvesting  machinery  is 

that    •    ♦    ♦    they  d^ould  say  how  their  goods  should  be  sold, 

have  fixed  prices  on  the  goods,  and  compel  all  agents  to  maintain 

prices  and  terms    *    ♦    *, 

Similar  views  were  frequently  expressed  by  representatives  of  the 

dealers  at  that  time. 

At  the  close  of  the  year  1893  the  demoralization  of  prices  in  the 
harvesting-machine  trade  was  reported  to  be  as  bad  as  ever,  and  it 
was  stated  that  the  efforts  of  the  manufacturers  to  prevent  price  cut- 
ting had  been  frustrated  by  some  manufacturer  taking  advantage  of 
any  agreement  by  cutting  prices,  but  that  a  strong  dealers'  association 
could  control  the  situation. 

In  January,  1894,  the  harvester  committee  of  the  Western  asso- 
ciation reported  that  the  manufacturers  recommended  "that  the 
retail  implement  dealers  should  establish  a  uniform  retail  price 
among  themselves."  At  the  same  meeting,  however,  the  president  of 
the  Western  association  said: 

It  is  not  the  province  of  this  association  to  regulate  prices  in 
any  way.    It  would  be  impossible  if  undertaken. 

State  associations  in  Wisconsin,  Pennsylvania,  and  Illinois  gave 
considerable  attention  to  prices  in  this  year,  and  a  local  association  in 
northeastern  Nebraska  is  reported  to  have  successfully  maintained  a 
fetail-price  schedule  during  the  season  of  1894. 

The  results  obtained  by  the  associations  in  their  attempts  to  improve 
conditions  in  the  harvesting-machine  trade  were  so  unsuccessful  that 
during  the  second  half  of  the  decade  most  of  the  State  associations 
either  disbanded  or  practically  suspended  operation.  The  Western 
association  not  only  maintained  its  existence  but  continued  to  grow. 
It  held  steadily  to  the  price  policy  announced  in  1894,  but  neverthe- 


OBGANIZATION   AND  DEVELOPMENT  OF  ASSOCIATIONS. 


17 


# 


less  continued  its  efforts  to  bring  about  conditions  under  which  retail 
prices  would  be  maintained  or  advanced  to  a  more  profitable  level. 

The  Implement  Dealers'  Bulletin,  established  by  the  Western  asso- 
ciation in  1896,  was  effective  in  this  work.  In  1896  it  advocated  the 
organization  of  local  clubs  as  of  paramoimt  importance.  In  1897 
special  attention  was  given  to  the  maintenance  of  territorial  lines 
between  agents  for  the  same  machine.  In  1898  a  letter  was  published 
suggesting  that  the  manufacturers  establish  the  margin  of  retail 
profit.  But  always  the  editor  was  urging  the  responsibility  of  the  in- 
dividual dealer  to  maintain  a  profitable  price.  It  does  not  seem  pos- 
sible that  the  cordial  relations  arising  from  the  annual  conventions 
and  continued  admonitions  of  the  Bulletin  could  have  failed  to  have 
an  appreciable  influence  on  retail  prices. 

It  is  not  possible  to  measure  the  effects  of  these  efforts  to  stop 
price  cutting.  The  degree  of  success  of  dealers'  associations  in  accom- 
plishing their  purposes  appears  to  have  been  largely  measured  by  the 
number  of  members  represented  by  its  officers  or  committeemen  in 
their  negotiations  with  manufacturers.  State  and  interstate  associa- 
tions of  dealers  had,  however,  materially  curtailed  the  number  of 
direct  and  irregular  sales,  even  when  their  members  constituted  a 
relatively  small  proportion  of  the  total  number  of  all  dealers  in  the 
territory  represented.  Nevertheless,  a  single  dealer  outside  the  influ- 
ence of  the  associations  could  demoralize  the  trade  of  an  entire  county. 
Consequently,  in  later  years,  though  the  organized  dealers  continued 
to  be  active  in  soliciting  members  for  their  State  and  interstate  asso- 
ciations, they  became  even  more  desirous  of  securing  the  membership 
of  all  eligible  dealers  for  their  local  clubs. 

An  account  has  already  been  given  of  the  organization  of  the 
National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 
facturers in  1894.  This  association  took  much  the  same  attitude 
toward  wholesale  prices  as  the  Western  association  toward  retail 
prices.  The  wagon  manufacturers  and  the  plow  manufacturers  con- 
tinued their  meetings  throughout  the  decade.  It  is  not  clear  from 
the  fragmentary  information  available  that  anything  was  accom- 
plished except  to  maintain  more  harmonious  relations  than  would 
otherwise  have  existed  and  to  give  the  different  manufacturers  more 
exact  information  as  to  the  prices  of  their  competitors. 

Apparently,  implement  manufacturers  and  implement-dealers  were 
not  greatly  interested  in  association  work  in  the  later  nineties,  be- 
cause the  great  prosperity  of  the  American  farmer  in  1897-1899 
brought  with  it  equal,  if  not  greater,  prosperity  for  the  implement 
business.  At  the  close  of  the  nineteenth  century,  however,  the  costs 
of  raw  materials  in  the  implement  industry  showed  a  marked  in- 
crease. For  20  years  the  manufacturers  had  pushed  the  substitution 
68248'— 15 2 


.-,1 


FARM-MACHINEBY  TRADE  ASSOCIATIONS. 


of  iron  and  steel  for  wood.  But  even  with  the  relatively  decreased 
demand  for  wood  materials  the  supply  of  hardwood  was  being  ex- 
hausted in  certain  sections  and  its  price  was  going  up.  The  effect 
of  the  earlier  large  combinations  in  the  steel  industry  and  the  world- 
wide boom  in  this  industry  which  occurred  at  the  close  of  the  decade 
showed  itself  in  the  closing  months  of  1899,  when  prices  averaged  100 
per  cent  higher  than  in  December,  1898.  At  Pittsburgh  gray-forge 
pig  iron  had  advanced  from  $9.25  to  $21.75,  Bessemer  pig  iron  from 
$10.45  to  $25,  and  steel  billets  from  $15.25  to  $43. 

These  conditions,  which  considerably  reduced  the  very  large  profits 
of  the  years  immediately  preceding,  brought  the  associations  in  other 
branches  of  the  industry  into  renewed  and  effective  activity  and 
facilitated  the  combination  of  the  chief  binder  manufacturers  in  a 
single  company.  The  effects  on  the  costs  of  farm  implements  are 
well  illustrated  by  data  available  in  regard  to  the  binder  business. 
A  binder  that  cost  $38  in  1898  and  1899  cost  $50  in  1900.  The  aver- 
age price  of  all  binders  of  this  make  sold  in  1899  was  about  $90;  in 
1900,  a  little  less  than  $100.  The  aggregate  cost  of  all  machines 
sold  in  1898  by  one  of  the  largest  binder  manufacturers  would 
be  increased  about  17  per  cent,  if  1900  costs  for  the  different  ma- 
chines were  substituted  for  the  1898  figures.  The  advance  in  its 
average  selling  price  was  about  9  per  cent.  Sales  of  machinery,  not 
including  repairs  or  twine,  which  amounted  to  between  $19,000,000 
and  $20,000,000  in  1898,  for  a  certain  group  of  companies  increased 
to  almost  $29,000,000  in  1902.  In  spite  of  this  increase  of  practi- 
cally 50  per  cent  in  sales,  statements  from  companies  which  did  this 
business  show  that  the  net  profit  thereon  fell  off  very  markedly. 
These  data  show  further  that  their  cost  of  producing  $100  worth  of 
harvesting  machinery  in  1898  was  only  $42,  while  in  1902  it  had  in- 
creased to  $51.*  Their  selling  expense  had  also  increased  from  $21 
in  the  earlier  to  $27  in  the  later  year,  and  in  consequence  the  profit 
declined  from  37  per  cent  on  net  sales  in  1898  to  22  per  cent  in  1902. 
Even  imder  these  circumstances,  however,  they  earned  a  high  rate  of 
profit  on  their  investments.  The  average  price  realized  for  all 
binders  sold  by  these  concerns  in  1900  was  nearly  $105,  and  in  1902 
less  than  $100.  During  these  years,  as  earlier,  concessions  were  fre- 
quent, and  in  some  cases  large. 

While  no  such  precise  data  are  available  in  regard  to  the  situation 
in  other  branches  of  the  industry,  there  is  evidence  that  the  factory 
cost  of  farm  wagons,  plows,  and  seeding  machines  also  increased. 

The  annual  meetings  of  the  wagon  manufacturers  during  the 
nineties  have  already  been  referred  to.  Although  in  1891  it  was  an- 
nounced that  their  object  was  not  to  advance  prices,  nevertheless 

^This  increased  manafacturlng  cost  was  probably  in  part  doe  to  the  growing  export 
trade  and  the  larger  production  of  rakes. 


'tt\      f      H 


•1> 


0 


OEGANIZATION  AND  DEVELOPMENT  OF  ASSOCIATIONS. 


19 


ft    w 


prices  continued  to  be  their  principal  interest.  In  1895,  for  example, 
a  resolution  adopted  by  the  association  asserted  that  an  advance  of 
over  50  per  cent  in  the  prices  of  material  made  an  increase  in  selling 
prices  necessary.  In  the  two  following  years  a  conmiittee  worked  on 
the  preparation  of  a  uniform  price  list,  but  on  December  15,  1897, 
this  committee  reported  "  that  owing  to  the  difference  in  construction 
of  the  various  wagons  made  by  the  members  of  the  association,  it  is 
impossible  to  formulate  a  uniform  price  list." 

The  only  meeting  of  the  wagon  association  in  1897  was  the  one  at 
which  it  received  this  report.  There  is  no  record  of  any  meeting  in 
1898.  The  members  seemed  convinced  of  the  impracticability  of 
/)  filxing  prices,  and  consequently  of  the  futility  of  association  work. 
But  the  latter  conviction,  if  it  existed,  was  short  lived;  in  1899  the 
association  met  seven  times.  Increased  cost  of  materials  and  the 
necessary  advance  in  prices  was  almost  the  only  topic  discussed.  At 
a  meeting  April  6, 1899, 15  members  gave  estimates  of  the  increase  in 
cost  of  materials,  which  ranged  from  $3.45  to  $5.07  per  wagon.  Two 
methods  of  dealing  with  prices  were  suggested  at  this  meeting, 
namely,  information  as  to  each  other's  prices  and  independent  action 
in  advancing  prices.  At  a  meeting  on  June  21  an  even  more  marked 
increase  in  costs  was  reported,  and  on  September  6  the  association 
recommended  that  prices  for  January  1,  1900,  should  be  20  per  cent 
higher. 

In  1899  the  wagon  manufacturers  sought  to  obtain  a  more  powerful 
means  of  controlling  prices,  namely,  the  consolidation  of  the  leading 
factories.  Early  in  the  year  about  20  companies  signed  an  agreement 
to  combine  their  interests,  but  apparently  they  were  not  able  to  satisfy 
New  York  underwriters  as  to  the  prospects  for  a  wagon  trust.  The 
project  was  not  given  up,  however,  for  from  time  to  time  during  the 
next  10  years  different  schemes  were  brought  to  the  attention  of  trust 
promoters,  and  it  was  not  until  1909  that  apparently  the  conviction 
was  forced  upon  the  advocates  of  consolidation  either  that  wagon 
manufacture  did  not  lend  itself  to  trust  manipulation  or  that  greater 
activity  in  the  enforcement  of  the  antitrust  acts  made  such  a  course 
dangerous. 

Information  in  regard  to  the  plow  situation  is  even  less  definite 
than  that  in  regard  to  wagons.  The  same  evident  dissatisfaction 
with  the  results  of  association  work  ended  in  an  attempted  combina- 
tion of  interests  in  1899.  As  the  completion  of  the  consolidation 
would  necessarily  take  time,  in  order  to  meet  the  immediate  emer- 
gency due  to  increased  cost  of  materials,  in  Jime,  1899,  the  association 
recommended  an  advance  of  20  per  cent  on  plows,  corn  planters, 
harrows,  and  cultivators  to  take  effect  on  the  business  of  1900. 

In  the  meantime,  plans  for  the  consolidation  of  the  plow  industry 
met  with  a  much  greater  degree  of  apparent  success  than  attended 


20 


]fABM-MACHIN£BY  IBADE  ASSOCIATIONS. 


* 

like  efforts  of  the  wagon  manufacturers.  In  1901  the  American  Plow 
Co.  was  incorporated,  and  stock  was  to  be  taken  by  nearly  all  the 
leading  plow  manufacturers,  but  finally  the  refusal  of  one  or  tw© 
important  concerns  to  enter  the  combination  defeated  the  whole 
project.  Practically  all  effort  at  cooperation  appears  to  have  been 
abandoned  until  1907. 

Up  to  the  period  of  high  cost  beginning  with  1899  the  grain-drill 
manufacturers  had  cooperated  in  an  informal  manner,  and  as  mem- 
bers of  the  National  Association  of  Agiicultural  Implement  & 
Vehicle  Manufacturers.  The  National  Association  of  Grain  Drill 
Manufacturers  was  formed  in  1902.  Apparently,  however,  some  of 
the  strongest  manufacturers  were  convinced  that  association  effort 
could  not  satisfy  their  purposes,  and  in  March,  1903,  about  half  the 
coimtry's  output  of  grain  drills  was  consolidated  in  the  American 
Seeding  Machme  Co. 

The  organization  of  the  International  Harvester  Co.,  in  August, 
1902,  brought  about  90  per  cent  of  the  binder  production  and  over 
80  per  cent  of  the  mower  production  under  the  control  of  that  com- 
pany. The  formation  of  this  consolidation  was  followed  by  the  sub- 
stantial elimination  of  price  concessions  to  dealers,  although  no 
formal  advance  was  made  in  prices  for  several  years. 


"^ 


« 


«V) 


m      * 


^ 


f.  VA 


CHAPTEK  II. 

WHOLESALE   PEICE  ACTIVITIES   OF  MANTTTACTUEERS' 

ASSOCIATIONS. 

Section  1.  Introduction. 

\  Trade  associations  of  implement  manufacturers  have  made  various 

efforts  during  the  last  15  years  to  advance  prices  for  the  benefit  of 
their  members.  In  view  of  the  great  complexity  of  implement-price 
statistics  (see  p.  14) ,  the  great  amount  of  time  and  expense  necessary 
for  the  examination  of  accounts  of  individual  companies,  the  wide 
variety  of  conditions  involved  in  the  operations  of  different  concerns, 
and  numerous  other  factors  affecting  the  movement  of  prices  that 
would  have  to  be  taken  into  consideration,  it  is  impracticable  to 
measure  accurately  the  results  of  these  efforts.  The  official  records 
of  these  associations  indicate,  however,  that  a  considerable  influence 
has  been  exercised  on  prices,  and  sometimes  they  indicate  its  extent. 
They  also  show,  at  least  in  part,  the  methods  which  were  adopted  to 
influence  the  course  of  prices  and  the  purposes  which  actuated  the 
associations  and  their  members. 

The  general  advance  in  commodity  prices  during  the  last  15  years 
is  a  matter  of  common  knowledge.  During  this  period  substantial 
increases  have  taken  place  in  the  wholesale  and  retail  prices  of  dif- 
ferent kinds  of  farm  machinery  and  implements,  though  in  some 
branches  there  have  been  at  times  marked  decreases.  Generally 
speaking,  data  gathered  by  the  Bureau  relative  to  the  prices  for  these 
years  show  comparatively  little  uniformity  of  movement,  and  for 
most  branches  of  the  business  the  movements  of  prices  might  be 
largely  accounted  for  by  changes  in  the  cost  of  production  and  dis- 
tribution or  other  normal  influences  of  supply  and  demand.  Never- 
theless, the  prices  of  farm  machinery  have  been  frequently  influenced 
to  some  extent,  in  some  cases  by  monopolistic  conditions  and  in  others 
by  concerted  action  of  members  of  associations  in  particular  branches. 

In  some  branches  of  the  farm-machinery  industry  where  advances 
had  been  particularly  marked,  improvements  in  the  machines  or 
advances  in  the  cost  of  materials  probably  account  in  a  large  meas- 
ure for  the  increase  in  prices.  For  example,  the  advance  in  the 
prices  of  farm  wagons  has  been  especially  notable,  amounting  to 
possibly  25  per  cent,  but  during  the  period  under  consideration  the 


AjS 


9ABM-MAGHIKEBY  TRADE  ASSOGIATION& 


WHOLESALE  PBICE  ACTIVITIES. 


23 


advance  in  the  cost  of  materials  used  by  wagon  makers  has  probably 
been  even  greater.  Materials,  however,  are  only  one  element  in 
the  cost  of  production,  and  an  advance  in  the  cost  of  materials  may 
be  offset  by  reductions  in  cost  in  other  directions,  so  that  the  total 
cost  is  not  necessarily  increased.  For  example,  the  margms  between 
total  costs  and  prices  for  the  International  Harvester  Co.  for  most 
kinds  of  machines  were  higher  from  1908  to  1911  than  from  1903 
to  1907.  However,  for  farm  wagons,  that  concern,  while  doing  about 
15  per  cent  of  the  business  in  the  United  States  in  1910  and  1911,  was 
making  only  a  small  profit  thereon.^ 

In  general,  the  farm-machinery  business  in  the  United  States  has 
been  prosperous  for  well-managed  concerns.  The  net  earnings  of 
the  International  Harvester  Co.  in  1911  were  nearly  three  times  its 
earnings  in  1904.  Furthermore,  according  to  figures  compiled  by 
that  company,  the  aggregate  outstanding  capital  stock  of  304  of  its 
competitors  increased  from  about  $46,000,000  in  1902  to  $228,000,000 
in  1912-13.  Of  these  304  companies,  107,  or  over  one-thu'd  of  the 
total,  were  organized  after  1902.  Much  of  the  new  capital  has  been 
invested  in  the  manufacture  of  farm  engines,  tractors,  etc.,  the  use  of 
which  has  increased  rapidly  in  the  past  few  years.  The  number  of 
new  concerns  formed  to  manufacture  some  of  the  older  lines,  such  as 
plows,  farm  wagons,  or  grain  drills,  forms  a  relatively  small  propor- 
tion of  the  total.  Such  information  as  is  available  in  regard  to  these 
branches  of  the  trade  does  not  indicate  that  the  associations  of  manu- 
facturers producing  these  lines  succeeded  in  enhancing  prices  in  any 
marked  degree.  Nevertheless,  the  concerted  activities  of  the  associ- 
ations clearly  show  intent  on  the  part  of  their  members  to  increase 
prices  and  profits. 

In  the  following  sections  of  this  chapter  is  given  an  account  of 
the  activities  of  the  various  associations  in  regard  to  wholesale  prices 
and  terms,  particularly  agreements,  recommendations,  and  measures 
calculated  to  produce  a  general  enhancement  of  prices. 

Section  2.  Activities  of  the  National  Wagon  Mannfactnren'  Association. 

The  rapid  advance  in  the  cost  of  materials  for  farm  wagons  dur- 
ing 1899  and  the  consequent  revival  of  association  activity  on  the 
part  of  the  manufacturers  in  that  line  have  already  been  noted. 
(See  p.  19.)  At  the  meeting  in  September,  1899,  when  they  decided 
to  advance  prices  20  per  cent,  a  committee  was  appointed  to  receive 
estimates  of  costs  and  selling  prices,  but  this  action  was  reconsidered, 
as  only  about  10  of  the  20  members  present  were  prepared  and  willing 
to  furnish  these  figures. 

^  Bei»ort  of  the  Commissioner  of  Corporations  on  ttie  International  Harvester  Co.,  p.  241. 


il); '       ' 


», 


^. 


i*4 


At  the  next  meeting,  on  November  22,  1899,  a  greater  degree  of 
confidence  in  each  other  prevailed  among  the  members.  In  address- 
ing the  members  the  president  ascribed  unsatisfactory  prices  to 
mutual  distrust  and  said  that  the  worth  of  the  association  was  in 
establishing  confidence  among  its  members.  He  held  that  informa- 
tion "  coming  from  first  hand  "  would  steady  the  members  and  take 
away  the  fear  which  prompted  them  "to  make  ridiculously  low 
prices." 

Full  discussion  followed  regarding  advances  each  manufacturer 
expected  to  make  in  1900.  At  its  close  a  committee  on  classification 
of  wagons  was  appointed,  and  each  one  present  promised  to  bring 
\  to  the  next  meeting  his  estimate  of  the  cost,  f .  o.  b.  factory,  and  the 
selling  price  of  a  3-inch  and  3i-inch  wagon,  with  26-inch  poplar  box, 
lazy-back  spring  seat,  gear  brake,  and  box  brake.  A  motion  "that 
all  the  discussion  as  taken  down  by  the  stenographer  be  eliminated 
entirely  from  the  minutes  of  this  meeting,  and  that  it  shall  not  be 
written  out  at  all  in  longhand,"  was  carried.  Thus,  they  established 
the  policy  of  free  confidential  discussion  of  each  other's  costs  and 
prices,  and  study  of  actual  conditions,  which  was  effectively  con- 
tinued through  1900  and  1901. 

At  the  meeting  in  December,  1899,  reports  of  members  on  costs  and 
selling  prices  were  collected.  These  reports  showed  a  striking  dif- 
ference in  costs  and  prices.  The  costs  of  a  3J  by  10  inch  skein, 
28-inch  double-box  farm  wagon,  IJ  by  |  inch  tire,  lazy-back  spring 
seat  and  box  brake,  f.  o.  b.  factory,  ranged  from  $30.65  to  $46.70; 
the  lowest  time  prices  to  dealers,  in  carload  lots,  from  $47  to  $61.56 ; 
to  jobbers,  from  $43.25  to  $54.50.\ 

Thus,  wagons  answering  to  the  same  general  description  showed 
variations  in  cost  of  over  50  per  cent.  These  differences  can  be 
accoimted  for  by  differences  in  specifications,  in  volume  of  output, 
and  in  efficiency  of  production,  and  partly  also  by  differences  in 
the  method  of  cost  accounting.  Only  the  first  of  these  conditions 
would  have  any  considerable  effect  on  quality.  Therefore,  the  prices 
to  dealers  given  above,  which  vary  over  30  per  cent,  probably  in- 
dicate the  actual  difference  in  the  wagons  themselves  more  accurately 
than  the  costs. 

As  already  noted  (see  p.  19),  a  committee  had  been  appointed  in 
1896  to  formulate  a  uniform  price  list  for  farm  wagons.  Conviction 
of  the  impracticability  of  this  plan  led  to  its  abandonment.  It  ap- 
peared practicable,  however,  to  attempt  the  formulation  of  a  uniform 
price  list  for  tires  and  extra  depths  of  boxes,  and  the  committee  was 
continued  for  that  purpose.    This  was  a  simpler  task,  but  the  fol- 

*  Apparently,  the  confidence  of  the  manufacturers  In  each  other  was  not  so  strong  that 
the  reports  from  different  manufacturers  were  submitted  to  anybody  but  the  committee 
which  averaged  them.    The  records  were  destroyed. 


24 


1"ABM-MACHINEBY  TRADE  ASSOCIATIONS. 


lowing  remarks  of  the  chairman  of  the  committee  at  the  meeting  of 
December  20,  1899,  are  quoted  in  full,  because  of  the  indication 
they  give  of  the  difficulties  of  price  control  by  the  wagon  manufac- 
turers: 

We  got  together  to-day  to  try  and  get  some  kind  of  a  report 
to  present  but  ran  against  a  great  many  obstacles  and  we  come 
to  you  now  for  a  little  instruction.  In  the  first  place,  one  gen- 
tleman figures  his  iron  at  2  cents;  another  at  2i  cents,  and  a 
third  at  2|  cents.  One  man  thinks  he  ought  to  figure  iron  at 
just  what  it  costs  him,  and  I  believe  in  figuring  at  a  little  above 
cost,  and  then  there  was  a  question  as  to  whether  it  was  desired 
that  we  present  a  report  as  to  the  net  amount  to  be  charged  extra 
for  different  widths  and  thicknesses  of  tires  on  different  sizes  of 
wagons,  or  whether  we  should  present  a  list  price.  If  a  list 
price,  then  we  have  got  to  know  something  about  the  discount 
you  want  to  figure.  If  a  net  price,  we  want  to  know  something 
about  how  you  figure  your  profit,  and  what  profit  do  you  want 
to  make? 

My  idea  was  that  we  figure  all  wide  tires  on  a  basis  of  2^ 
cents;  we  figure  iron  at  2^  cents;  it  may  not  be  that  price  to-day. 
It  is  possible  some  wagon  makers  buy  it  cheaper  than  that.  It 
will  cost  at  our  place  $2.26,  while  here  in  Chicago  it  will  prob- 
ably be  $2.28  or  $2.29,  and  at  some  places  over  $2.40. 

We  are  not  very  far  off  on  boxes,  yet  we  do  not  exactly  know 
how  to  present  that  report,  whether  we  shall  figure  what  the  net 
price,  or  the  gross  price  shall  be. 

I  would  like  to  hear  some  expressions  of  the  gentlemen  here 
as  to  how  they  are  accustomed  to  figure  these  things.     I  think  in 
figuring  wide  tires  you  want  to  leave  yourself  some  leeway,  and 
I  will  say  right  here  for  myself  that  we  are  in  the  habit  of  figur- 
ing all  our  tire  on  the  basis  of.  2^  cents  for  iron,  and  then  to  our 
jobbers  we  figure  to  get  25  per  cent  profit  over  that.    I  figure  the 
cost  of  a  set  of  wheels  with  regular  tires,  and  I  figure  the  cost 
of  a  set  of  wheels  with  all  variations  and  thicknesses  and  that 
is  the  difference  in  the  cost;  that  takes  in  your  labor  and  your 
wide  rims,  and  the  difference  in  making  the  weld  and  setting  the 
tires. 
The  committee  was  instructed  to  assume  that  iron  used  in  the 
manufacture  of  farm  wagons  cost  $2.30  f.  o.  b.  Chicago  and  poplar 
lumber  $40  per  M  feet.    They  were  also  instructed  to  take  no  account 
of  the  cost  of  certain  accessories,  namely,  grain  cleats,  antispreader 
chains,  and  top-box  fasteners. 

The  actual  extent,  and  also  the  lack  of  uniformity,  in  the  advances 
made  as  the  result  of  the  resolution  adopted  in  September,  1899  (see 
p.  19) ,  is  indicated  by  statements  by  representatives  of  the  different 
companies  October  30, 1900,  which  read,  in  part,  as  follows : 

Company  1:  "  Our  advance  January  1, 1900,  over  January  1, 1899, 
was  $8.50.'^ 
Company  2 :  "  Our  advance,  $8,  over  January  1,  1899." 


]    ' 


WHOLESALE  PRICE  ACTIVITIES. 


25 


^>  ^  ^ 


VI. 


« 


4> 


A 

4 


^      ■',  •■# 


L 


Company  3 :  "  January  1, 1899  was  a  low-water  mark  in  prices  and 
our  maximum  advance  was  $10." 

Company  4 :  "  Can  not  give  exact  figures  but  our  advance  in  price 
was  $7  only." 

Company  5 :  "  Have  reduced  price  $2.50  from  highest  notch  and  are 
now  $5  over  January  1,  1899." 

Company  6:  "*    *     *    an  advance  of  $4.50." 

Of  the  27  concerns  that  reported,  10  gave  either  $10  or  20  per  cent 
as  their  advance  on  January  1,  1900. 

A  drop  in  the  price  of  iron  in  the  early  part  of  1900  caused  a  meet- 
ing of  the  association  to  be  called,  in  the  belief  that  some  of  the  manu- 
,         facturers  might  be  inclined  to  reduce  the  price  of  wagons.    The  fol- 
T       lowing  is  a  list  of  questions,  which  were  answered  by  the  29  members 
*  present  at  this  meeting  held  in  April,  1900 : 

(1)  Have  you  made  any  concessions  in  prices  since  last  meet- 
ing? 

(2)  What  do  you  think  will  be  the  course  of  the  market  in  iron 
and  other  material  during  the  next  few  months? 

(3)  Do  you  think  it  advisable  to  make  any  reduction  on  the 
present  price  of  wagons ;  if  so,  how  much  ? 

(4)  Will  you  agree  to  maintain  present  prices  of  wagons,  imtil 
neit  meeting  of  the  association? 

(5)  What  is  your  situation  in  labor? 

At  this  meeting  a  member  asserted  that  as  the  members  had  stood 
together  on  an  advancing  market  they  should  do  so  on  a  declining 
one.  The  prevailing  answer  to  question  4  in  the  list  above  was  that 
prices  would  be  maintained  if  other  manufacturers  maintained  them ; 
that  is,  there  was  a  definite  agreement  to  maintain  existing  prices, 
although  there  was  no  uniformity  in  those  prices. 

After  full  discussion  by  the  members  the  following  report  of  a 
committee  was  indorsed  at  the  meeting  of  April  26, 1900 : 

Your  committee  concludes  that  there  is  nothing  in  the  present 
situation  which  justifies  any  change  in  the  price  of  wagons. 

That  while  the  price  of  iron  is  slightly  lower,  indications  are 
that  a  further  material  reduction  will  not  occur  in  the  immediate 
future. 

That  the  price  of  lumber  is  being  maintained  and  dry  stock 
more  difficult  to  procure. 

That  increase  in  the  cost  of  production  of  wagons  is  greater 
by  reason  of  the  increased  cost  and  scarcity  of  labor. 

That  the  present  dull  period  was  anticipated  some  time  ago 
and  your  committee  advise  that  the  members  of  this  association 
proceed  with  confidence  to  maintain  their  established  prices. 

In  September,  1900,  however,  because  of  the  considerable  reduction 
in  the  price  of  iron,  although  wood  stock  and  other  material  and 
labor  had  not  fallen,  the  association  voted  that  if  any  member  of  the 
association  deemed  it  necessary  to  reduce  prices  such  reduction  should 


20 


FABM-MAGHINEBY  TEABB  ABSOGIATIOK& 


I 


not  b©  more  than  5  per  cent  below  January  1, 1900,  prices.  On  Octo- 
ber 30,  reductions  were  reported,  as  follows: 

Company  1 :  "  Have  reduced  $2.50." 

Company  2 :  "  *    *    *    we  reduced  nearly  $3.'* 

Company  3 :  "  Have  now  reduced  it  $2." 

Company  4 :  "Advanced  $10  and  reduced  to  $7.** 

Company  5 :  "  *    *    *    have  made  no  reduction.** 

Company  6 :  "  We  have  made  no  reduction  under  high  prices,  ex- 
cept in  two  cases." 

Company  7:  "We  figure  our  present  prices  same  as  January  1, 
1900." 

Nearly  all  reported  reductions  since  the  beginning  of  the  year,  but 

apparently  prices  were  still  over  $5  higher  than  in  the  previous  year. 
One  of  the  members  said,  "  Prices  are  up  now  and  we  ought  to  keep 
them  up." 

In  May,  1901,  members  reported  their  cost  of  production  under 
the  following  instructions: 

Please  fill  out  this  sheet  and  bring  it  to  the  next  mer;ting 
May  29,  1901. 

Do  not  sign,  or  make  any  other  marks  of  identification. 

Please  give  your  costs  on  the  following  wagons,  and  figure 
on  the  regular  style,  two-horse,  cast-skein  farm  wagon,  such 
as  sold  the  Mississippi  Valley  trade,  and  do  not  include  anti- 
spreader  chains,  top-box  holders,  nor  grain  cleats. 

Gears  and  beds  (poplar)  separately. 

I*  *  *  ♦  #  #  • 

In  figuring  costs  please  be  careful  to  include  all  material, 
labor  and  expense  (general  and  incidental) ;  in  fact,  total  costs 
for  delivery  on  board  cars  at  your  factory.  Except  coat  of  sell- 
ing.   Base  your  figures  on  cost  of  May  15, 1901. 

A  compilation  was  made  from  these  reports,  but  the  descriptions 
are  so  indefinite  that  the  figures  are  of  slight  value.  They  show  the 
same  wide  range  of  costs  as  before.  At  this  meeting  the  association 
recommended  an  advance  of  5  per  cent  on  all  shipments  after  July  1, 
1901,  but  in  November,  1901,  one-third  of  the  members  reported  that 
they  had  made  no  advance.  About  the  same  number  reported  an 
advance  of  5  per  cent. 

The  year  1902  was  marked  by  dissatisfaction  with  old  methods  of 
work  and*  the  adoption  of  new  ones.  It  was  asserted  that  the  low 
prices  complained  of  were  due  to  lack  of  knowledge  in  regard  to 
costs  of  production  and  distribution  quite  as  often  as  to  pressure  of 
competition.  A  meeting  on  April  23,  1902,  was  devoted  principally 
to  an  elaborate  explanation  of  costs  by  one  of  the  members.  This  led 
the  association  to  enter  into  a  "  cost-finding  campaign,"  referred  to 
the  next  year  as  "  the  most  important  work  yet  undertaken  by  this 
association." 

In  the  discussion  of  costs  by  different  members  at  the  time  of  the 
institution  of  the  cost-finding  campaign  it  was  brought  out  that  the 


WHOLESALE  PBICE  ACTIVITIES. 


27 


i|» 


♦ 


i«  -*' 


4> 


"4 


u 


charge  for  general  expenses,  or  "  co-expense,"  as  it  was  called,  varied 
from  38  per  cent  of  shop-labor  cost  to  153  per  cent  of  that  cost.  The 
total  cost  of  a  wagon  as  determined  by  reports  at  this  meeting  in 
April,  1902,  varied  from  $35  to  $48.37,  with  an  average  of  $42.43. 
The  records  of  the  association,  however,  give  no  specifications  for 
the  wagon  on  which  reports  were  made.  It  was  voted  unanimously 
"  that  each  member  pledges  his  word  of  honor  that  he  will  go  home 
and  figure  in  detail  the  present  cost  of  his  wagons  and  add  to  them 
a  fair  profit  and  immediately  change  his  present  selling  price  in 
accordance,  regardless  of  what  price  his  competitor  is  making."  A 
form  of  schedule  for  collating  costs  on  a  uniform  basis  was  pro- 
vided for  the  use  of  members.  No  rule  appears  to  have  been  estab- 
lished, however,  as  to  what  was  a  fair  rate  of  profit.  Moreover,  it 
is  obvious  that  this  method  alone  fails  to  bring  about  uniformity 
of  prices,  inasmuch  as  two  concerns  making  substantially  the  same 
kind  of  wagon,  but  with  different  costs  of  production,  would  have 
to  make  different  prices  for  substantially  the  same  article. 

During  1902  a  committee  was  appointed  to  take  into  consideration 
the  possibility  of  improving  terms  of  credit.  It  was  found  that 
any  joint  action  in  regard  to  terms  was  not  feasible,  and  two  years 
later  the  committee  was  discharged. 

An  attempt  to  establish  prices  for  tires  in  1900  had  apparently 
worked  successfully,  and  the  policy  of  making  prices  on  parts  was 
carried  still  further  in  1902  by  a  vote  that  the  selling  prices  of  boxes 
and  extra  top  boxes  should  not  be  less  than  10  per  cent  over  the  aver- 
age cost  as  shown  in  the  cost  compilation.  A  price  of  35  cents  apiece 
was  also  established  for  lock  chains,  which  had  been  furnished  free 
by  a  considerable  number  of  manufacturers  up  to  that  time.  An  at- 
tempt to  fix  the  price  at  25  cents  a  set  for  top-box  fasteners  failed. 
A  committee  on  publicity  was  appointed  for  the  purpose  of  spread- 
ing information  in  regard  to  the  low  return  on  investments  in  wagon 
manufacture  and  discouraging  new  enterprises. 

Recognizing  that  the  great  variation  in  wagons  was  unnecessary 
and  made  list  prices  on  complete  wagons  impossible,  a  committee  was 
appointed  in  the  latter  part  of  1902  to  make  up  standard  specifica- 
tions based  on  the  old  Government  standard  wagon.  A  committee  on 
cost  accounting  and  one  on  the  general  reorganization  of  the  associa- 
tion were  also  appointed.  It  had  been  found  that  the  terms  of  manu- 
facturers' contracts  with  jobbers  interfered  in  some  cases  with  ad- 
vancing prices,  but  before  the  close  of  1902  all  members  of  the  asso- 
ciation who  sold  through  jobbers  reported  that  their  contracts  pro- 
vided for  advances  in  price  in  accordance  with  advances  in  the  cost 
of  materials. 

Relatively  small  results  were  obtained  during  1903.  The  com- 
mittee on  costs  pushed  its  work  energetically  throughout  the  year. 


28 


FABM-MACHINBBY  TBADE  ASSOCIATIONS. 


A  report  from  the  committee  on  standardization  was  accepted,  but 
apparently  without  direct  results.  The  recommendation  made  by  the 
committee  on  reorganization,  for  the  employment  of  a  commissioner 
who  should  have  control  of  and  regulate  prices  in  the  different 
localities  for  each  manufacturer,  giving  due  consideration  to  the 
usual  difference  in  prices  of  the  various  brands  of  wagons,  was  con- 
sidered, but  a  new  committee  was  appointed  to  formulate  a  plan  for 
the  better  maintaining  of  prices.*  A  committee  on  labor  statistics 
was  also  appointed  and  did  more  or  less  work  during  the  year,  but 
apparently  without  any  important  result. 

On  February  3,  1904,  the  committee,  which  was  appointed  in  the 
preceding  November,  to  formulate  a  plan  and  recommend  measures 
by  which  prices  could  be  better  maintained  made  a  report.^  This 
report  outlined  the  plan  which  formed  the  basis  of  the  subsequent 
price  policy  of  the  association,  and  it  should  be  noted  that  a  similar 
policy  has  been  followed  by  associations  in  other  branches  of  the 
farm-machinery  industry  since  that  time.  Starting  from  the  ac- 
cepted fact  that,  because  of  variations  in  the  specifications  of  various 
factories,  it  would  be  impossible  at  that  time  to  fix  standard  selling 
prices  for  complete  wagons,  the  committee  recommended  as  a  first 
step  the  establishment  of  a  minimum  price  on  boxes.  It  recommended 
that  this,  if  successful,  be  followed  by  similar  action  in  respect  to 
other  parts,  such  as  seats,  brakes,  and  extra  width  and  thickness  of 
tire.  The  preparation  of  list  prices  for  a  complete  wagon,  with  uni- 
form variations  of  price  in  accordance  with  variations  in  specifica- 
tions, was  suggested  as  a  possible  future  undertaking. 

The  committee  recognized  that  the  proposed  work  was  one  that 
could  not  be  carried  through  successfully  without  thorough  organiza- 
tion and  the  expenditure  of  a  considerable  amount  of  money.  It 
recommended  that  an  assessment  should  be  levied  upon  each  member 
of  the  association  equal  to  one-quarter  of  1  per  cent  upon  the  shop 
pay  roll  for  the  year  1903;  that  a  committee,  to  be  known  as  the 
executive  committee,  consisting  of  from  9  to  12  representative  manu- 
facturers, should  have  charge  of  the  work,  and  should  employ  a 
competent  man  as  secretary.  This  secretary  should  gather  detailed 
information  as  to  materials,  construction,  estimated  costs,  and  sell- 
ing prices  under  the  direction  of  the  executive  committee,  and  should 
tabulate  the  information  and  present  it  to  the  committee  without 
mentioning  the  names  of  members.  The  committee  should  then 
prepare  a  schedule  of  minimum  prices  on  wagon  boxes  for  different 

iThe  committee  was  known  as  the  Reorganlaatlon  Committee.  Its  members  were 
F.  D.  Suydam,  of  the  MUbum  Wagon  Co.,  Toledo,  Ohio ;  W.  C.  Nones,  of  the  Kentncky 
Wagon  Manufacturing  Co.,  of  Louisville,  Ky. ;  E.  Louis  Kuhns,  of  the  Studebaker  Bros. 
Maimlacturing  Co.,  of  South  Bend,  Ind. ;  C.  A.  Gelger,  of  the  Troy  Wagon  Works  Co.,  of 
Troy,  Ohio ;  and  F.  L.  Mitchell,  of  the  Mitchell  ft  Lewis  Co.,  Ltd.,  of  Bacine,  Wis. 

*  This  report  will  be  found  In  full  as  Exhibit  11,  |^  2M» 


WHOLESALE  PRICE  ACTIVITIES. 


29 


4 


classes  of  the  trade  based  on  this  report  and  send  a  copy  to  each 
member  of  the  association.  This  report  should  be  the  unanimous 
recommendation  of  the  committee,  and  upon  its  adoption  by  the 
association  all  members  thereof  should  agree  to  be  governed  thereby 
in  their  business. 

This  plan  was  submitted  to  all  members  by  mail.  At  the  commit- 
tee meeting  on  April  15,  1904,  it  was  reported  that  39  concerns, 
having  a  pay  roll  of  $2,500,000,  were  in  favor  of  putting  it  into 
operation;  6,  having  a  pay  roll  of  $150,000,  were  opposed,  and  11, 
with  a  pay  roll  of  $270,000,  were  undecided.  The  committee  then 
took  charge  of  the  work.^  They  were  asked  to  open  their  accounts 
to  the  secretary  for  evidence  on  prices  and  terms  for  boxes  and  other 
parts  of  wagons.  This  information  was  to  be  divulged  to  no  member 
of  the  committee  or  of  the  association.  At  this  meeting  it  was  rec- 
ommended that  a  member  representing  the  Southeastern  Department 
of  the  association  should  be  added  to  the  committee. 

In  carrying  out  the  recommendations  of  the  committee,  the  work  of 
standardizing  specifications  and  prices  for  parts  of  wagons  was  first 
undertaken.  The  secretary  was  instructed  to  obtain  and  tabulate 
information  relative  to  wagon  boxes,  extra  or  tiptop  boxes,  box 
brakes,  and  spring  seats.  Each  manufacturer  participating  was 
requested  to  send  a  copy  of  his  latest  catalogue  and  price  list  at  once 
to  the  secretary.  Shortly  afterwards  the  question  of  standardizing 
wheel  heights  was  taken  up,  and  also  the  sizes  for  extra  widths  of 
tires  on  standard  farm  wagons  for  all  territories.  A  schedule  of 
charges  for  tires  ^  adopted  in  October,  1900,  was  readopted  in  August, 
1904,  as  minimum  prices  to  dealers,  prices  to  jobbers  being  12 J  per 
cent  less.  It  was  voted  that  this  list  apply  to  all  wheels  regardless 
of  height.  Later,  in  1904,  a  minimum  price  was  adopted  for  gear 
brakes  and  for  box  brakes. 

At  a  meeting  of  the  committee  in  August,  1904,  it  was  decided  that 
the  minutes  should  be  made  to  read  "recommend"  instead  of 
"agree."  The  proceedings  of  the  association  in  September  of  that 
year  make  it  clear,  however,  that  there  was  a  definite  purpose  to 

^  In  the  meantime  six  more  members  were  added  to  the  five  that  had  already  been 
appointed  (see  footnote  on  p.  28).  The  committee  then  became  known  as  the  "  Wagon 
Makers*  Committee  "  or  the  "  Committee  of  Eleven."  Later  it  became  the  executive  com- 
mittee of  the  association.  The  six  members  added  were  as  follows :  H.  M.  Kinney,  of  the 
Winona  Wagon  Co.,  of  Winona,  Minn. ;  W.  H.  Weber,  of  the  Weber  Wagon  Co.,  of  Chicago, 
111. ;  W.  Schuttler,  of  the  Peter  Schuttler  Co.,  of  Chicago,  111. ;  W.  A.  Rosenfleld,  of  the 
Moline  Wagon  Co.,  of  Moline,  111. ;  George  R.  James,  of  the  James  &  Graham  Wagon  Co., 
of  Memphis,  Tenn. ;  and  Frank  Slosson,  of  the  Bain  Wagon  Co.,  of  Kenosha,  Wis.  Sub- 
sequently, C.  F.  Milburn,  of  the  Chattanooga  Wagon  Co.,  of  Chattanooga,  Tenn.,  also 
became  a  member  of  the  committee  as  the  representative  of  the  southeastern  department 
of  the  association,  a  separate  organization  composed  of  a  number  of  farm-wagon  oiana- 
facturers  in  the  Southeastern  States. 

«  See  Exhibit  15,  p.  271. 


30 


FABM-MACHINEBY  TRADE  ASSOCIATIONa 


establish  fixed  prices  on  all  parts  sufficiently  unifonn  in  character 
to  make  that  course  practicable.  Their  own  opinion  as  to  the  char- 
acter of  this  policy  is  indicated  by  a  vote  of  the  association  that— 

No  member  of  this  association  in  adopting  any  of  these  recom- 
mendations mention  the  association  or  this  committee — that  it  be 
done  of  their  own  volition  and  that  it  is  not  proper  information 
for  the  travelers,  jobbers  or  dealers. 

In  September,  1904,  the  association  adopted  the  recommendation  of 
the  committee  that  a  26  inch  by  10  foot  6  inch  box,  the  shop  cost  of 
which  was  $10.52,  should  be  sold  to  the  jobber  for  $11.50  and  to  the 
dealer  for  $13.  Other  prices  recommended  and  adopted  were  as 
follows: 


lO-indi  «xtra  top  box 

Two-leaf  spring  seat,  with  lazy  back. 
Feed  boxes 


The  allowance  for  grain  cleats  was  fixed  at  50  cents  for  metal  and 
25  cents  for  wood.  It  was  also  decided  "  that  the  present  prices  for 
wagons  shall  be  rigidly  maintained  for  the  coming  year." 

In  1905  the  work  toward  a  more  uniform  product  was  pushed 
vigorously.  In  June  standardized  wheel  heights  were  adopted,  and 
the  number  of  the  different  heights  of  wheels  was  reduced  to  five. 
It  is  said  that  41  heights  of  wheels  had  been  made  by  different  manu- 
facturers. The  secretary  made  a  preliminary  report  on  terms,  and 
was  instructed  to  select  a  territory  in  which  it  would  be  easy  to  bring 
about  a  favorable  change  and  try  to  secure  the  views  of  the  manufac- 
turers and  jobbers  and  bring  them  together  in  conference.  At  this 
meeting  the  roll  call  of  the  members  indicated  that  a  large  majority 
had  complied  with  the  resolution  fixing  prices  on  various  parts  of 
wagons.  One  of  the  manufacturers  claimed  that  his  concern  had 
already  saved  several  thousand  dollars  on  minor  parts  in  this  way. 

At  a  meeting  in  November,  1905,  the  association  decided  to  advance 
prices  on  3i-inch  wagons  not  less  than  $2  on  January  1, 1906,  .with  a 
proportionate  advance  on  other  sizes.  At  the  same  meeting  the 
secretary  reported  that  he  had  made  arrangements  for  a  conference 
with  jobbers  and  manufacturers  at  Kansas  City  on  the  subject  of 
terms.  The  executive  committee  suggested  "  that  the  parties  in  in- 
terest •  •  •  confer,  with  the  object  of  bettering  the  conditions 
on  terms."    The  association  was  pledged  to  lend  all  assistance 

possible. 

The  progress  of  the  work  of  the  association  gradually  brought 
out  the  fact  that  its  new  policy  looked  to  a  more  definite  control  of 


WHOLESALE  PBICE  ACTIVITIES. 


31 


f 


^'    '    1^ 


■~4 


prices  and  that  the  secretary  was  expected  to  investigate  prices  re- 
ported to  him  as  below  the  recommendations  of  the  association. 
Members  were  urged  to  give  careful  attention  to  their  costs  and  to 
compilations  of  selling  prices  furnished  them  from  information 
gathered  by  the  secretary.  Those  who  found  their  selling  prices 
below  the  average  were  urged  to  advance  them.  In  order  to  enable 
the  secretary  to  carry  on  his  work  more  effectively,  in  November, 
1905,  it  was  recommended — 

That  it  be  agreed  that  each  member  will,  when  called  upon  to 
do  so,  furnish  to  the  secretary  original  papers  such  as  letters, 
bills,  contracts,  for  his  information  and  guidance  only. 

He  was  also  instructed  to  visit  each  of  the  factories  after  this 
advance  in  price  was  made  effective  in  order  to  verify  the  selling 
prices  of  the  different  manufacturers. 

In  January,  1906,  the  secretary  issued  a  bulletin  beginning  as 
follows : 

The  sole  purpose  of  this  bulletin  is  to  learn  from  each  member 
the  status  of  his  prices  for  1906  with  relation  to  the  increased 
cost  and  the  resolution  passed  at  our  meeting  November  16, 1905. 

Inclosed  with  this  bulletin  was  a  list  of  questions.*  Concerning 
these  questions,  the  secretary  said: 

We  must  have  the  complete  restoration  of  faith  and  confidence 
in  each  other,  consequently  only  frank  and  absolutely  depend- 
able answers  will  do  to  the  questions  I  ask  you  to  answer  on  the 
accompanying  sheet. 

During  1906  the  association  gave  considerable  attention  to  costs 
of  materials  and  standardization  in  order  to  reduce  such  costs,  and 
work  was  undertaken  for  improving  conditions  in  the  retail  trade. 
(See  pp.  58  and  218.)  Nevertheless,  the  principal  interest  of  the 
association  continued  to  be  their  effort  to  establish  satisfactory  prices. 
At  a  meeting  of  the  executive  committee  in  March  it  developed  that 
existing  methods  were  not  satisfactory,  because  they  allowed  "con- 
siderable latitude  on  the  part  of  individuals  and  the  recommendations 
of  the  association  [were]  not  carried  out  in  a  way  that  seemed  desir- 
able." In  the  hope  of  obtaining  better  results,  the  secretary  was 
instructed  to  ask  manufacturers  for  "  prices,  terms  of  sale,  discount 
for  cash  and  place  of  delivery,  upon  which  such  wagons  are  sold  to 
jobbers,  semi  jobbers,  and  retail  dealers  "  in  "  Kansas  City  territory," 
"Minneapolis  territory,"  "Southern  territory,"  etc. 

It  was  also  decided  that  when  the  association  recommended  an 
advance  in  prices  "  the  trade  shall  be  notified  thereof  by  circular  let- 
ters or  postal  cards,  all  of  even  date,  to  be  mailed  from  each  factory 
days  before  the  date  set  for  such  new  prices  to  go  into  effect." 

» This  Ust  of  questions  is  shown  In  full  In  Exhibit  12,  p.  265. 


O'CI 


FASM-HACM1N£B¥   TRADE  ASSOCIATIONS. 


These  notices  were  to  be  mailed  on  receipt  of  advice  from  the  secre- 
tary and  on  a  day  to  be  fixed  by  him. 

The  practice  of  a  full  discussion  of  costs,  which  had  apparently 
worked  so  satisfactorily  in  the  years  following  1899,  was  continued. 
At  a  meeting  in  March,  1906, 17  manufacturers  reported  the  increase 
in  cost  of  producing  a  3J-inch  standard  wagon  over  that  of  January, 
1005.    These  reports  varied  from  $2  to  $4.05. 

There  was  more  or  less^  anxiety  in  regard  to  the  legality  of  work 
that  was  being  undertaken  by  the  association.  In  July  the  execu- 
tive committee  submitted  their  proposed  recommendations  in  regard 
to  prices  to  their  attorneys,  who  advised  them  "  to  go  ahead  "  and 
that  it  would  be  safe  to  include  the  words  "  5  per  cent "  in  recom- 
mending the  advance.  The  attorneys  considered  that  the  fact  that 
prices  at  which  wagons  were  sold  were  not  uniform  and  that  the  5 
per  cent  advance  was  merely  recommended  rendered  the  whole  trans- 
action legal  so  far  as  the  Sherman  act  or  State  antitrust  statutes 
were  concerned.  Upon  this  assurance  of  the  legality  of  their  pro- 
cedure, the  association  adopted  the  recommendation  of  the  executive 
committee : 

That  every  member  of  the  association  prepare  a  letter  notify- 
ing their  trade,  including  jobbers,  of  an  advance  of  5  per  cent 
over  present  prices,  to  take  effect  from  and  after  the  date  the 
secretary  notifies  them  to  send  them  out,  and  that  the  secretary 
notify  them  to  date  and  send  them  out  when  he  has  received  a 
copy  of  printed  letter  from  every  member  of  this  committee  and 
from  such  other  members  of  the  association  who  are  not  members 
of  this  committee  as  the  secretary  may  deem  necessary. 

Up  to  September  17, 1906,  the  secretary  had  received  from  34  dif- 
ferent manufacturers  their  letters  announcing  this  advance,  which 
were  to  be  sent  according  to  his  instruction  on  September  15. 

At  an  executive  committee  meeting  later  in  the  year  the  secretary 
called  attention  to  the  differences  in  the  cost  figures  submitted.  It 
was  admitted  by  all  that  mistakes  had  been  made,  that  the  subject  of 
costs  was  not  thoroughly  understood  by  all  members,  and  that  it  was 
essential  to  have  accurate  figures  to  work  upon  in  determining  what 
course  to  pursue  in  the  matter  of  prices.  Nevertheless,  one  member 
of  the  committee  said : 

The  question  of  costs  of  your  wagons  given  in  the  association 
will  do  and  has  done  more  to  bring  the  wagon  business  up  to 
where  it  is  now  than  any  other  one  subject. 

This  comment  is  interesting  because  of  the  claim  for  effective 
work  by  the  association.    In  this  connection  the  member  said: 

While  we  can  not  undertake  to  regulate  selling  prices,  we 
can  educate  those  that  are  making  these  lower  reports  as  to  their 
costs,  and  we  can  accomplish  a  whole  lot  of  good  that  will  not 
show  in  open  meeting,  but  will  show  in  personal  results. 


WHOLESALE  PBICE  ACTIYIHES. 


33 


4 


Commenting  on  these  remarks,  the  president  of  one  of  the  impor- 
tant companies  advocated  additional  help  for  the  secretary,  saying : 

An  association  with  the  money  invested  that  this  association 
has,  can  well  afford  to  spend  $2,000  or  $3,000  a  year  more  money 
if  we  can  by  doing  that  get  a  balance  wheel  for  everybody,  and 
a  man  in  whom  we  have  confidence  that  when  he  shows  us  or 
tells  us  that  we  are  in  error  regarding  what  the  other  fellow  is 
doing  that  we  will  believe  him.  ♦  ♦  ♦  Now,  if  I  have  been 
in  error  to  start  with  I  will  continue  to  be  in  error,  but  if  he 
finds  that  I  have  figured  a  certain  wagon  much  below  the  aver- 
age, why,  when  he  comes  to  our  place,  he  says,  "How  do  you 
figure  that  a  3 J  wagon  figures  what  you  have  ?  Let  me  see  your 
figures  ?  "  and  I  give  them  out,  and  he  says,  "  You  are  wrong  on 
your  wheels,"  or  You  are  wrong  on  your  gear; "  I  am  only  too 
glad  to  change  it  as  I  am  getting  expert  help  at  a  minimum  cost. 

In  spite  of  the  dissatisfaction  with  results  referred  to  above,  it  was 
reported  that  estimates  of  the  money  value  of  the  association  made 
by  different  members  were  very  gratifying  and  showed  that  the  dues 
paid  by  the  members  were  profitable  investments. 

Reports  to  the  secretary  late  in  1906  and  early  in  1907  illustrate 
the  great  range  in  prices  received  by  manufacturers  for  2-horse  farm 
wagons.  The  prices  reported  were  the  lowest  at  which  the  manufac- 
turer would  sell.  In  Kansas  City  and  Dallas  territory,  minimum 
cash  prices  on  3J-inch  wagons  to  the  dealer  by  carloads  at  the  factory 
varied  from  $51.30  to  $65.  The  time  prices  for  the  same  wagons 
were  $54  and  $70.  There  is  no  information  available  as  to  the 
maximum  prices  received  by  the  individual  manufacturer,  but  if  they 
were  known  the  variation  shown  above  would  probably  be  increased. 

However,  uniformity  is  not  essential  to  a  general  advance  in  prices, 
and  at  a  meeting  in  March,  1907,  it  was  voted  to  recommend  that 
every  member  immediately  prepare  a  letter  notifying  his  trade  of  an 
advance  of  5  per  cent  in  his  prices  on  wagons,  extras,  and  repairs, 
to  take  effect  as  soon  as  the  members  should  be  notified  by  the  sec- 
retary that  he  had  received  a  printed  letter  announcing  the  inten- 
tion of  every  member  of  the  executive  committee  to  make  the  ad- 
vance, and  also  of  as  many  other  members  as  the  secretary  might 
deem  necessary.  The  secretary  fixed  April  20  as  the  date  when  the 
advance  should  go  into  effect,  and  members  were  urged  to  send  their 
letters  promptly  to  the  trade.  An  inquiry  made  by  the  secretary 
shortly  afterwards  indicated  that  the  advance  had  been  made  by 
almost  every  member,  as  well  as  by  the  International  Harvester  Co. 
and  the  Studebaker  company,  two  of  the  largest  manufacturers  of 
farm  wagons  outside  the  association,  and  also  by  various  jobbers. 

In  June,  a  similar  inquiry  was  made  to  ascertain  the  extent  to 
which  the  advances  on  tires,  boxes,  and  extra  boxes  recommended  by 
68248'— 15 8 


t) 


S4' 


FABM-MACHINEKY  TRADE  ASSOCIATIONS. 


the  association  had  be^  put  into  effect.  It  was  found  that  the  recom- 
mendations had  been  followed  by  nearly  all  the  members.  The 
secretary  announced  his  intention  of  visiting  the  factories  of  various 
members  who  had  not  put  the  recommendations  into  effect,  in  order  to 
take  the  matter  up  with  them. 

Meantime,  several  members  appear  to  have  become  apprehensive 
that  the  action  taken  by  the  association  in  advancing  prices  was 
illegal,  and  at  a  meeting  of  the  executive  committee  held  in  June, 
1907,  the  secretary  read  several  communications  from  members  on 
the  subject  and  stated  that  he  had  replied  to  them  that  the  associa- 
tion was  in  no  way  violating  the  National  antitrust  laws,  and  that 
there  seemed  no  grounds  for  apprehension,  as  the  work  and  procedure 
of  the  association  was  and  had  always  been  merely  recommendatory 
•ind  in  violation  of  no  law.  A  committee  was  appointed  to  report  on 
the  matter  later  if  necessary.  A  few  days  later  the  secretary  issued  a 
bulletin  on  the  subject  of  antitrust  legislation.  This  read,  in  part, 
as  follows: 

The  three  essential  points  to  the  National  act  and  the  real  basis 
of  all  State  acts  on  this  question  are  these : 
The  entering  into  a  fixed  or  binding  agreement  between  two  or 

more  persons. 

The  fixing  of  price  on  any  article  of  commerce. 

The  controlling  or  regulating  of  the  volume  of  output  of  any 
article  of  commerce. 

You  certainly  are  aware  that  we  do  not  do  any  one  of  these 
three  things,  for  in  every  case,  whatever  advice  we  give,  it  is 
merely  in  the  nature  of  a  recommendation  with  no  penalW  at- 
tached to  its  nonacceptance  or  nonperformance,  and  I  am  frank 
to  say  to  you  that  we  never  passed  a  recommendation  that  was 
carried  out  unanimously  by  every  member  of  the  Association, 
and  were  it  not  for  the  fact  that  the  large  majority  who  receive 
these  recommendations  recognize  their  wisdom  and  business 
value,  they  would  amount  to  nothing,  as  every  member  is  at  lib- 
erty to  accept  or  reject  them  at  his  pleasure,  so  that  in  following 
the  recommendations  that  we  pass  you  are  not  violating  the  law 
any  more  than  if  these  recommendations  or  suggestions  were  sent 
out  in  book  form  as  the  wisdom  of  some  individual  author;  so 
I  trust  if  you  have  any  apprehension  on  this  score,  this  explana- 
tion, which  is  based  on  fact,  will  dispel  it 

This  matter  was  again  taken  up  for  consideration  at  a  meeting  of 
the  association  held  at  Chicago  in  September,  1907,  and  on  advice  of 
an  attorney  who  had  been  consulted  it  was  voted  "  that  the  actions 
of  this  association  recommending  minimum  or  fixed  prices  for  extra 
wagon  boxes,  spring  seats,  brakes,  lock  chains,  or  any  other  parts  of 
wagons,  be  now  rescinded  and  that  all  such  action  be  expunged  from 
the  minutes."  One  of  the  members  present  called  attention  to  the 
fact  that  this  resolution  only  expunged  those  recommendations  that 


f 


<! 


tV 


i  1 


^^ 


4 


WHOLESALE   PEICE  ACTIVITIES. 


35 


established  fixed  prices,  but  still  left  in  effect  the  percentage  ad- 
vances that  had  been  recommended  both  on  wagons  and  the  parts  of 
wagons. 

The  general  question  had  already  been  considered  by  the  executive 
committee  at  a  meeting  held  just  prior  to  the  meeting  of  the  general 
association.  The  point  was  raised  whether,  in  view  of  the  fact  that 
questions  were  continually  coming  up  as  to  the  legality  of  the  proceed- 
ings under  the  antitrust  laws,  it  would  not  be  well  to  have  some 
attorney  present  at  all  meetings  of  the  executive  committee  and  of 
the  association,  so  that  if  members  got  "  on  dangerous  ground  "  the 
attorney  could  check  the  matter  "  then  and  there."  One  member  of 
the  committee  said : 

My  idea  is  that  there  is  a  good  deal  in  the  phraseology  you  use, 
and  we  can  pass  the  resolution  and  then  let  the  secretary  consult 
with  the  attorney  and  put  it  in  the  proper  shape  to  avoid  trouble, 
but  the  substance,  the  meat  in  the  resolution,  can  be  preserved. 

At  a  meeting  of  the  executive  committee  held  at  this  time  an 
advance  in  the  prices  for  1908  was  recommended.  Although  a  major- 
ity of  the  members  of  the  association  favored  an  advance  of  5  per 
cent,  it  was  voted  to  recommend  that  the  members  of  the  association 
should  not  take  any  orders  for  shipment  beyond  March  1,  1908,  at 
the  prices  then  prevailing.  An  effort  was  also  made  to  improve  the 
terms  on  which  wagons  were  being  sold. 

It  was  thought  that  the  increase  in  the  costs  of  manufacture  justi- 
fied better  prices  for  wagons,  and  in  this  connection  the  secretary  sug- 
gested that  at  definite  times  in  each  year  the  questions  of  costs  and 
price  adjustment  should  be  considered,  and  that  each  manufacturer 
should  fix  certain  dates  between  which  orders  might  be  taken  at  prices 
then  prevailing. 

A  little  later  the  effects  of  the  financial  depression  of  1907-8 
began  to  be  felt.  At  a  meeting  of  the  executive  committee  in  Decem- 
ber, 1907,  it  was  decided  that  under  the  existing  conditions  it  would 
be  unwise  to  suggest  any  price  policy  for  1908  except  to  recommend 
that  the  existing  prices  be  maintained  and  that  no  wagon  maker 
should  take  orders  for  shipment  later  than  July  1  except  at  an 
advance.  A  meeting  of  the  association  was  also  held  in  December 
1907,  at  which  a  resolution  was  adopted  urging  its  members  to 
discontinue  the  use  of  the  commission  contract,  and  further  resolu- 
tions were  passed  defining  the  terms  for  commission  contracts  when 
used,  and  fixing  maximum  terms  on  straight  sales  in  different  sec- 
tions of  the  United  States.  The  object  in  both  cases  was  to  shorten 
terms  of  credit  as  much  as  possible.  In  June,  1908,  the  recommenda- 
tion in  regard  to  terms  was  reaffirmed  by  the  association,  and  "  each 
member  was  urged  to  continue  shortening  their  selling  terms  in  every 
territory  wherever  possible." 


S6 


FABM-MACHINERY  TRADE  ASSOCIATIONS. 


At  the  meeting  in  December,  1907,  the  members  of  the  association 
also  voted  to  cooperate  in  furnishing  information  to  a  committee  ap- 
pointed for  each  distributing  territory  to  look  into  the  subject  of  a 
standard  price  list  and  equipment  for  complete  wagons.  In  carrying 
out  this  plan  the  secretary  issued  a  bulletin  in  February,  1908,  which 
read,  in  part,  as  follows: 

You  will  recall  that  at  one  of  our  recent  meetings  the  pre- 
paring of  a  STANDAiu)  or  UNIFORM  PRICE  LIST  was  recommeuded. 
Tliis  proposition  has  been  before  the  wagon  manufacturers 
several  times  during  the  past  25  years,  and  although  much  de- 
sired, never  has  been  quite  successful;  but  as  nothing  of  this 
character  is  impossible,  we  are  going  to  make  another  effort, 
which  I  am  sure  will  be  successful  with  your  cooperation. 

Our  first  attempt  will  be  to  find  a  base  wagon,  and  to  ascer- 
tain how  a  standard  wagon  should  be  equipped  in  each  sellmg 
territory,  which  will  draw  the  line  between  necessary  equipment 
and  extras  that  are  often  given  awav  and  unnecessary. 

Another  benefit  that  should  be  derived  is  the  equalization  of 
differences  that  now  exist  between  sizes  of  the  same  description 

of  wagon.  ......  .11  i_       .         *^ 

We  trust,  therefore,  that  special  attention  will  be  given  to 

filling  out  and  returning  promptly  the  enclosed  blanks,  which 

we  are  only  sending  to  those  akeady  having  trade  m  certain 

selling  territories. 
As  a  result  of  the  investigation  thus  undertaken,  a  list  of  standard 
equipment  for  each  territory  was  adopted  by  the  association  in 
December,  1908.^    (See  Exhibit  13,  p.  266.) 

The  industrial  depression  of  1908  was  especially  trymg  for  manu- 
facturers of  farm  wagons.  For  several  years  sales  had  been  pushed, 
and  the  falling  off  in  demand  found  large  stocks  in  the  hands  of  the 
dealers.  Under  these  conditions  factories  were  not  operated  on  full 
tune.  In  April,  1908,  the  executive  committee  recommended  to  the 
association  that  the  curtaihnent  of  production,  which  had  apparently 
been  initiated  by  the  manufacturers  severally,  be  continued  and  that 
selling  prices  be  maintained.  The  secretary  reported  that  the  5  per 
cent  advance  in  prices  that  had  been  recommended  in  1907  had  not 
only  been  made  effective,  but  had  been  maintained  during  the  inter- 
vening months  of  light  trade.  In  June,  1908,  the  association  re- 
affirmed the  recommendations  regarding  output  and  prices  that  had 
been  adopted  in  April.  It  was  felt  by  some  of  the  members  that  as 
overhead  expenses  had  not  decreased  in  proportion  to  sales  it  would 
hardly  be  fair  to  take  costs  as  a  basis  for  selling  prices. 

Some  idea  of  the  strain  under  which  the  industry  was  laboring 
at  this  time  may  be  obtained  from  the  fact  that  the  number  of 

iln  referring  to  the  purpose  of  making  this  compilation,  the  secretary  made  the  follow- 
inc  remarks  at  a  meeting  of  the  executive  committee  in  April.  1908 : 

thit^tU^e^s^m^s?^  ':Jr.o'lVl^^^^.x:kl^^^^^ 

£  ihat  is  U8^^  the  territory,  and  prevent  a  member  going  into  a  new  terrltorj. 
SrMshlng  a  lot  of  extras  not  required  and  without  charge. 


^ 


WHOLESALE   PRICE  ACTIVITIES. 


37 


H 


%^ 


»• 


»\ 


•y 


wagon  manufacturers  as  listed  by  a  leading  trade  paper  decreased 
from  129  in  1906  to  98  in  1909.  This  was  not  due  to  any  extensive 
consolidation  of  competitors.  The  executive  committee,  convinced 
of  the  need  of  exact  information  in  their  efforts  to  improve  the 
situation,  agreed  to  submit  to  a  leading  firm  of  certified  public 
accountants  full  information  as  to  actual  conditions  in  their  busi- 
ness for  the  five  years  1903  to  1907,  inclusive.  This  seems  to  have 
been  the  first  resort  to  the  help  of  such  experts.  Apparently  nothing 
was  accomplished  at  that  time,  but  five  years  later  a  very  complete 
report  on  the  costs  of  wagons  in  the  factories  of  leading  members 
of  the  association  was  made  by  them.    (See  p.  52.) 

Toward  the  end  of  1908  the  trade  situation  for  the  farm-wagon 
manufacturers  became  even  more  difficult.  The  rapidly  increasing 
use  of  the  cheap  farm  truck,  the  manure  spreader,  and  the  automo- 
bile was  cutting  down  the  demand  for  standard  farm  wagons.  Of 
25  manufacturers  reporting  to  the  secretary  on  this  subject,  16  said 
that  they  were  making  farm  trucks.  Many  of  them  admitted  that 
there  was  very  little,  if  any,  profit  in  this  trade.  The  secretary 
reported  that  36  concerns  outside  of  the  association,  20  of  which 
were  not  wagon  manufacturers,  were  making  such  trucks,  and  that 
they  were  combined  with  boxes  from  outside  manufacturers  and 
sold  as  complete  wagons  at  lower  prices  than  the  regular  farm 
wagon.  The  rapidly  increasing  business  of  the  International  Har- 
vester Co.,  which  was  held  to  be  due  to  the  exceedingly  long  terms 
granted  by  that  company,  also  caused  much  anxiety.  A  similar 
source  of  uneasiness  was  the  very  large  cash  discount  given  by  the 
Moline  Plow  Co.  on  the  Mandt  wagon,  which  was  rapidly  increasing 
the  wagon  business  of  that  concern. 

In  spite  of  these  conditions,  in  October,  1908,  the  secretary  was 
able  to  report  that  there  was  little  price  cutting  in  or  out  of  the 
organization.    He  said: 

The  answers  to  Ques.  5  as  to  continued  maintenance  of  prices 
need  no  comments,  for  after  twelve  months  of  dull  trade  and 
poor  business  it  shows  a  wonderful  strength  of  purpose  and  a 
most  intelligent  comprehension  of  the  actual  conditions  of 
trade  *  *  *.  At  several  of  the  fall  meetings  of  industrial 
associations  like  our  own,  a  very  strong  effort  has  been  exerted 
to  have  their  members  realize  that  manufacturing  will  be  con- 
ducted under  greater  rather  than  less  expense  than  in  the  past, 
and  any  idea  of  selling  the  product  at  lower  prices  is  not  to  be 
thought  of. 

At  a  meeting  of  the  association  in  December,  1908,  the  conditions 
of  the  trade  were  fully  considered,  and  at  the  conclusion  of  the  dis- 
cussion the  following  resolutions  were  unanimously  adopted: 

That  this  association  recommends  an  advance  of  10  per  cent 
over  present  selling  prices. 


38 


FAKM-MACHINBRY  TBADE  ASSOCIATIONS. 


WHOLESALE  PRICE  ACTIVITIES. 


a9 


That  no  orders  be  taken  after  May  1,  1909,  without  this  10 
per  cent  advance  being  applied.  ^    .oAn 

That  no  orders  be  taken  between  this  date  and  May  1,  190^, 
for  shipment  later  than  May  1,  1909,  except  at  10  per  cent  ad- 
vance over  present  selling  prices. 

That  it  is  recommended  that  each  member  send  out  notice  to 
his  selling  forces,  including  traveling  salesmen,  jobbers,  and 
dealers,  of  this  proposed  advance,  and  that  such  notice  be  mailed 
by  or  before  December  20,  1908,  and  that  a  copy  of  such  notice 
will  be  mailed  immediately  to  the  secretary. 
The  reasons  given  by  the  association  for  this  advance  may  be  sum- 
marized as  follows :  Greater  increase  in  costs  than  in  prices  in  the 
past;^  decrease  in  profit  per  wagon  during  recent  years  of  large 
trade ;  decreased  rate  per  wagon  not  sufficient  to  pay  fair  profits  on 
large  investment  still  necessary  under  the  decreased  demand ;  in- 
creased investment  because  of  increased  prices  of  material  with  the 
certainty  of  further  increase ;  failures  of  manufacturers  under  exist- 
ing conditions;  poorer  representation  in  the  retail  trade  because  of 
decreased  retail  profits;  ability  of  the  farmer  to  pay  a  fair  price, 
and  expectation  that  the  advance  would  not  decrease  demand.' 

Shortly  after  this  meeting  the  secretary  reported  that  he  had 
received  notices  of  the  proposed  advance  from  38  of  the  39  members. 
He  reported  that  two  large  outside  concerns  also  intended  to  put  the 
advance  into  effect,  but  that  they  hesitated  to  confer  with  repre- 
sentatives of  the  wagon  association,  largely  because  of  the  fear  that 
it  might  have  the  appearance  of  collusion  and  be  so  advertised.     It 
was  estimated  that  the  proposed  advance  would  yield  to  members 
an  additional  profit  of  approximately  $1,500,000.    Shortly  before 
the  time  for  the  advance  to  become  effective,  the  secretary  reported 
that  no  member  of  the  association  had  notified  him  that  they  would 
not  put  the  advance  into  effect,  and  at  a  meetmg  of  29  members  held 
April  28,  1909,  all  of  them  announced  their  intention  of  makmg  the 
fuU  advance  of  10  per  cent.    It  was  also  arranged  that  invoices  for 
shipments  after  May  1,  when  the  proposed  advance  was  to  go  into 
effect,  should  show  on  their  face  whether  the  order  had  been  taken 
before  or  after  May  1.    This  precaution  was  evidently  taken  to  pre- 
vent any  of  the  members  from  takmg  orders  at  the  old  prices  after 
the    date    fixed    for    the    advance.    Furthermore,  the    association 
adopted  a  resolution  reaffirming  the  action  taken  in  December,  1908, 
making  the  advance  apply  on  wagons,  parts  of  wagons,  and  extras 

in  all  territories. 
It  was  claimed  at  this  time  that  the  39  members  of  the  wagon  asso- 
•  ciation  made  three-fifths  of  the  total  output  of  farm  wagons.    A 
committee  had  been  appointed  to  call  upon  the  International  Har- 

lA  compilation  of  retunis  from  members  purported  to  show  that  from  1897  to  1907 
costs  bad  advanced  42  per  cent  and  prices  30  per  cent.  ia  «  97<L 

.  Tbe  full  text  of  the  letter  setting  forth  these  reasons  U  shown  in  Exhibit  14.  p.  270. 


f 


H 


vester  Co.,  the  Studebaker  Brothers'  Manufacturing  Co.,  and  other 
large  outside  concerns  to  learn  their  attitude  toward  the  advance. 
Delay  in  putting  the  advance  into  effect  on  the  part  of  some  of  the 
outside  concerns  caused  some  apprehension,  but  a  little  later  it  was 
reported  that  the  International  Harvester  Co.  had  advanced  their 
prices  5  per  cent,  and  it  was  announced  that  this  advance  of  only  5 
per  cent  had  been  made  in  several  other  instances.  It  was  found 
that  the  members  of  the  association  had  not  met  with  much  success 
in  booking  orders  at  the  10  per  cent  advance,  and  that  the  advance 
of  only  5  per  cent  made  by  outside  factories  had  made  it  imprac- 
ticable for  the  members  of  the  association  to  demand  more.  Accord- 
ingly, the  executive  committee  of  the  association  voted  in  July,  1909, 
to  recommend  "  to  the  membership  of  this  association  that  all  orders 
taken  from  and  after  the  date  of  this  meeting  be  at  an  advance  of  not 
less  than  5  per  cent  over  prices  in  effect  April  30, 1909."  ^ 

There  was  a  tacit  understanding  entered  into  at  this  meeting 
that  the  "  members  of  the  committee  who  had  voted  for  the  passage 
of  any  important  recommendation,  especially  those  related  to  in- 
creased costs,  would  notify  the  secretary  in  every  case  where  they 
contemplated  changing  the  general  policy  in  carrying  out  such  rec- 
ommendations, and  that  the  secretary  should  have  discretionary 
power  to  notify  the  other  members  of  the  committee  or  the  associa- 
tion as  he  might  deem  best." 

In  commenting  on  the  results,  the  secretary  in  November,  1909, 

said : 

We  stand  on  the  threshold  of  1910  with  our  prices  5  per  cent 

higher  than  in  1908  as  a  general  thing,  and  in  some  cases  10  per 

cent  higher. 
In  February,  1910,  the  secretary  of  the  association  sent  out  a  com- 
pilation of  wagon  prices  in  certain  specified  territories  for  the  infor- 
mation of  members.  These  prices  were  those  made  to  carload,  cash 
buyers,  f.  o.  b.  factory,  with  all  freight  equalizations  and  allowances 
of  every  kind  deducted.  A  somewhat  similar  list  had  previously 
been  sent  out  by  the  southeastern  department  of  the  association  (see 
p.  29)  to  its  members,  who  were  cautioned  to  note  that  the  prices 
shown  were  not  regular  selling  prices  of  the  different  concerns  repre- 

iThe  following  comment  was  made  by  the  secretary  when  sending  this  resolution  of 

the  executive  committee : 

As  to  the  certainty  of  maintaining  the  five  per  cent  advance  there  can  be  no 
Question  for  right  along  our  outside  competitors  have  realized  the  necessity  of  it 
and  most  of  them  have  put  on  that  amount,  also  the  indications  that  we  will  have 
a  laree  croo  and  good  prices  insure  it.  Let  us  therefore  not  be  disappointed  in  not 
bringing  down  everything  we  shot  at,  for  if  what  we  have  accomplished  during 
the  past  six  trying  months  is  considered,  we  have  made  great  gain  : 

First.  Prevented  the  lowering  of  1908  prices.  ,^       ..  ,.  ^, 

Second.  Stimulated  some  trade  early  in  the  year  that  would  not  have  come  ordi- 
narily, and  it  has  kept  us  moving.  ^     ,  ^  ,  ..       *     ^,       #.«.««„«» 

Third  Made  a  five  per  cent  advance  absolutely  sure  by  standing  for  ten  per 
cent  till  our  competitors  who  might  have  made  none  committed  themselves  to  five 

Fourth.  Advanced  prices  and  conditions  for  a  better  trade  basis  in  1910. 


40 


FARM-MACHINERY  TRADE  ASSOCIATIONS. 


sented.  In  January,  1010,  the  members  of  the  southeastern  depart- 
ment reaffirmed  the  recommendation  made  by  the  association  in 
December,  1908,  as  to  the  necessity  of  an  advance  of  10  per  cent  in 

prices. 

The  members  of  the  National  Wagon  Manufacturers'  Association 
held  a  meeting  in  May,  1910,  at  which  it  was  shown  that  an  advance 
in  selling  prices  made  in  1909  approximating  6  per  cent  was  being 
maintained  by  all.    In  October  the  secretary  reported : 

The  recommendation  passed  at  last  meeting  as  to  the  main- 
tenance of  prices  then  existing  has  been  generally  kept,  and  m 
some  few  cases  higher  prices  have  been  obtained,  while  lower 
prices  have  been  made  in  a  few  special  cases. 

The  matter  of  a  uniform  net  price  list  for  extras  or  common  repair 
parts  was  taken  up  by  the  secretary  in  the  early  part  of  1908.  He  had 
been  instructed  to  prepare  such  a  list  and  was  authorized  to  determine 
the  amount  of  profit  that  should  be  added  over  shop  costs  and  over- 
head expenses.  The  difficulties  in  preparing  this  list  are  suggested 
in  a  bulletin  sent  out  by  the  secretary  shortly  afterwards.  In  this 
bulletin  he  gave  the  average  cost  for  two  members  who  "  look  well  to 
their  costs,"  and  also  the  highest  and  lowest  prices  to  dealers  and  to 
jobbers,  reported  by  the  manufacturers  belonging  to  the  association, 
on  various  specified  parts  of  a  SJ-inch  farm  wagon.  The  costs  and 
prices  given  were  as  follows: 


Extra  part. 


Axle,  with  skeins 

Bolster,  wood,  no  stakes. 

Beach,  complete. 

Toogae: 

Drop,  complete 

stiff,  stick 

ETener....  •••*.•**••••.  • 
Neck  yoke ■ 


Shop 
cost. 


tl.M 

.86 

3.00 

L18 

.68 

.40 


Price  to  dealer. 


Low. 


S3. 88 

.86 
.79 

rm 

L43 

.47 
.60 


High. 


K25 
1.89 
1.60 

465 

&49 
1.16 
1.16 


Price  to  Jobber. 


Low. 


12.75 
.78 
.71 

9L61 

1.35 

.48 

.14 


High. 


13.65 
L70 
1.60 

S.90 

118 

.W 

LOB 


The  secretary  made  the  following  statement  in  this  connection: 

Comment  on  the  above  is  unnecessary,  as  fi^r^  show  for 
themselves  and  also  point  out  the  fact  that  while  in  some  in- 
stances fair  returns  are  being  obtained  for  these  parts,  in  other 
cases  these  extra  Jists  apparently  have  not  been  revised  in  many 
years,  and  with  the  increase  in  cost  of  materials,  and  workman- 
ship, these  parts  are  netting  the  factory  little,  if  anything,  above 
cost. 
The  list  prepared  by  the  secretary  was  submitted  by  him  in  Decem- 
ber, 1908,  but  as  several  members  considered  it  too  high  he  was 


^ 


WHOLESALE   PRICE  ACTIVITIES. 


41 


1    ' 


1    ^^^^ 


directed  to  revise  the  list  and  send  copies  of  it  to  all  members  as 
the  recommendation  of  the  association. 

These  instructions  to  the  secretary  were  apparently  carried  out  in 
1909,  and  in  October,  1910,  he  was  directed  to  again  "  furnish  a  copy 
of  the  suggested  base  upon  which  to  complete  list  of  of  catalogue 
prices  subject  to  any  discount  which  a  member  might  see  fit  to  make." 

It  was  understood  that  the  prices  of  this  list  should  be  net  prices, 
subject  only  to  a  regular  cash  discount  of  about  5  per  cent.  It  was 
pointed  out  that  if  members  desired  to  use  the  same  discount  as 
quoted  on  wagons  it  would  be  necessary  only  to  increase  the  amounts 
to  the  extent  that  when  discounted  they  would  bring  the  same  net 
results.  It  was  suggested  that  the  members'  old  price  lists  of  extras, 
made  when  wood  materials  were  low  in  price,  needed  revision  not 
only  to  "  correct "  the  margin  of  profit  but  also  to  prevent  loss.  The 
later  revision  of  the  list  in  1912  by  a  committee  of  the  farm-wagon 
department  of  the  National  Implement  &  Vehicle  Association  is 
referred  to  elsewhere.    (See  p.  50;  also  Exhibit  16.) 

Since  1911  the  farm-wagon  department  of  the  association  has  con- 
tinued the  work  of  the  National  Wagon  Manufacturers'  Association. 
Various  phases  of  its  activities  are  referred  to  on  pages  47-M. 

Section  3.  Activities  of  the  National  Plow  Association. 

Before  the  National  Plow  Association  was  first  organized,  in  April, 
1907,  some  understanding  had  apparently  been  reached  by  the  various 
plow  manufacturers  in  regard  to  the  classification  of  common  types 
of  walking  plows.*  At  any  rate,  immediately  following  the  organi- 
zation of  that  association,  the  members  proceeded  to  adopt  a  schedule 
of  list  prices  for  steel  walking  plows  and  lever  harrows,  with  speci- 
fied differential  charges  for  variations  from  the  scheduled  types. 
This  list  was  subject  to  the  discount  of  individual  members.  For 
certain  other  classes  of  plows  and  tillage  implements  no  uniform  list 
price  was  recommended,  owing  to  great  variations  in  equipment  and 
weight. 

Standard  equipment  for  disc  harrows  and  cultivators  was  adopted, 
a  standard  equipment  committee  was  created,  and  the  secretary  was 
directed  to  investigate  the  list  prices  of  different  members  on  com- 
mon parts  of  various  implements.  Members  who  found  it  necessary 
to  make  an  irregular  price  on  any  implement  on  which  the  association 
had  recommended  a  list  price  were  expected  to  notify  the  secretary. 
In  April,  1909,  it  was  announced  that,  with  only  minor  exceptions,  all 
members  of  the  association  had  adopted  the  recommendations  made 
by  the  standard  equipment  committee,  and  that  most  of  the  members 

iThlB  may  hare  been  the  result  of  the  work  of  the  earlier  association,  known  as  the 
**  Northwestern  Plow  ABSOclation/'  whose  records  have  not  been  available  for  exami- 
nation. 


42 


]>ABM-MACHIN£BY  TBADS  ASSOCUTIONa 


WHOLESALE  PRICE  ACTIVITIES. 


43 


had  adopted  the  new  list  prices  recommended  by  the  association  for 
extra  plowshares  for  the  trade  in  1909.  It  was  decided  that  members 
should  use  their  influence  with  their  branch-house  ipresentatives  to 
induce  them  to  adhere  to  the  recommendations  of  the  standard  equip- 
ment committee.  It  was  also  decided  that  when  imy  member,  because 
of  competition,  found  it  necessary  to  furnish  equipment  different 
from  the  standard  equipment  recommended  he  should  report  the  fact 
to  the  secretary  for  investigation  and  report  to  the  association. 

At  a  meeting  of  the  National  Plow  Association  in  October,  1900, 
the  secretary  made  a  report  on  the  advantages  of  list  prices  for  all 
implements  and  the  objections  thereto.  This  report  read,  in  part,  as 
follows : 

OBJECTIONS. 

First.  List  prices  not  practicable  on  account  of  difference  in 
construction,  weight,  and  cost.  ,,,.,,..       i, 

My  answer  is  that  take  for  illustration  a  16"  high-lift  sulky 
plow.  It  is  used  for  the  same  purpose  and  all  niembers  having 
adopted  the  same  equipment,  I  believe  uniform  list  prices  could 
be  established  based  on  the  highest  or  average  member's  cost. 
The  same  condition  applies  to  harrows,  cultivators,  etc. 

Some  may  say  that  all  walking  plows  of  the  same  style  and 
size  cost  the  same,  but  I  have  records  in  my  office  of  several 
members'  costs  on  a  plow  in  which  their  cost  of  material  varies 
68  cents,  and  their  cost  of  productive  labor  varies  56  cents.  The 
total  cost  of  material  and  labor  is  $5.52 ;  hence,  if  there  is  a  differ- 
ence in  the  members'  factory  costs  on  a  walking  plow  sellmg  at 
the  same  list  price  of  20  per  cent,  I  hardly  believe  there  could 
be  a  greater  difference  in  any  other  implements. 

Second.  Uniform  list  prices  would  tend  to  furnish  competitors 
with  more  information  regarding  net  selling  costs,  which  possibly 
would  result  in  cutting  prices.  ^    ,  , . 

My  answer  is  that  each  and  every  member  would  control  his 
discounts  the  same  as  the  present  on  walking  plows  and  lever  har- 
rows. If  one  member  had  an  advantage  over  another  m  the  con- 
struction and  cost  of  any  certain  implement  on  which  list  prices 
were  based  on  the  highest  cost,  it  would  enable  him  to  give  a 
larger  trade  discount,  but  it  would  not  be  necessary  to  make  ^e 
same  trade  discount  nor  the  same  cash  discount  on  all  goods.  He 
could  make  his  discount  40  per  cent  on  plows,  45  per  cent  on 
.  harrows,  50  per  cent  on  cultivators,  etc. 

ADVANTAGES.  ' 

First.  It  would  better  enable  you  to  make  a  profit  on  special 
styles  or  sizes  of  harrows,  cultivators,  and  planters,  which  are 
usually  made  in  small  quantities,  as  goods  made  in  small  quan- 
tities can  not  be  manufactured  as  cheaply  as  those  made  in  larger 
quantities.  By  adopting  list  prices  you  provide  agamst  such 
conditions,  the  same  as  has  been  done  on  three  and  four  section 
lever  harrowa 


# 


> 


As  you  are  aware,  up  to  two  years  ago,  it  was  customary  to  sell 
all  sizes  of  lever  harrows  at  a  net  price  per  section  and  usually 
based  on  the  cost  of  a  two-section  size,  which  secures  the  adoption 
of  the  list  prices  you  have  and  will  receive  about  the  same  ratio 
of  profit  on  the  three  and  four  section  sizes  as  on  the  similar  sizes. 

Second.  A  factor  of  great  importance  is  that  from  present 
indications,  your  next  purchases  of  raw  materials  will  cost  more 
than  your  last  and  that  you  will  be  obliged  to  increase  your 
selling  prices  if  you  intend  to  have  the  same  ratio  of  profit. 
In  view  of  the  proposed  advance  in  your  selling  prices,  it  seems 
like  an  opportune  time  to  adopt  list  prices  and  with  list  prices 
once  established,  it  would  simplify  the  modifying  of  selling 
prices  by  only  changing  the  discounts  to  accommodate  any 
changed  conditions  in  cost. 

Third.  It  would  benefit  the  majority  of  the  retail  dealers  if 
the  manufacturers'  list  prices  would  be  the  basis  for  their  selling 

prices. 

Fourth.  The  list  prices  would  represent  a  great  saving  of 
time  in  checking  up  the  contracts  as  received ;  also  minimize  the 
number  of  errors  which  always  necessitates  considerable  corre- 
spondence. . 

We  have  not  trespassed  upon  any  of  the  National  or  State 
antitrust  laws  by  attempting  to  regulate  production  or  to  regu- 
late the  net  selling  prices  of  implements,  and  by  establishing 
uniform  list  prices,  it  would  not  in  any  way  regulate  the  net 
selling  prices. 

I  believe  this  subject  to  be  of  great  importance  and  that  it  can 
be  made  very  profitable,  but  there  may  be  some  objections  which 
I  do  not  know  about,  hence  I  hope  all  members  present  will  dis- 
cuss this  subject  freely;  also  decide  to  call  a  special  meeting  for 
the  purpose  of  recommending  or  establishing  uniform  list  prices. 

All  members  present  except  three  favored  considering  the  subject. 
The  president  was  requested  to  appoint  a  committee  of  three  to  meet 
with  the  secretary  to  consider  this  subject  and  report  their  recom- 
mendations at  the  next  meeting. 

The  records  of  the  association  do  not  show  that  any  further  action 
was  taken  in  this  matter. 

In  April,  1910,  it  was  reported  that  all  members  of  the  plow  asso- 
ciation were  complying  with  the  various  recommendations  on  stand- 
ard equipment,  that  had  been  made  by  the  association.  Later  in  'the 
year  some  of  the  wholesale  houses  at  Dallas,  Tex.,  were  reported  to 
be  furnishing  certain  parts  as  regular  equipment  which  the  associa- 
tion had  recommended  should  be  considered  as  extras.  The  plow 
association  instructed  its  secretary  to  visit  Dallas  and,  if  the  equip- 
ment recommended  by  the  association  did  not  meet  the  approval  of 
the  wholesalers,  to  endeavor  to  reach  an  agreement  on  some  equip- 
ment satisfactory  to  all. 

Through  the  efforts  of  the  association,  the  Oliver  Chilled  Plow 
Works,  one  of  the  largest  plow  manufacturers  in  the  United  States, 


44 


FABM-MACHINERY  TRADE  ASSOCIATIONS. 


and  one  which  did  not  belong  to  the  association,  was  induced  in  1910 
to  adopt  the  list  prices  of  the  association  on  wood  and  steel  beam 
steel  plows,  and  also  to  advance  the  list  price  of  wood-beam  chilled 
plows  to  the  price  of  steel-beam  chilled  plows,  the  price  of  some  of 
the  latter  also  being  advanced. 

That  this  advance  in  list  prices  was  expected  to  effect  an  advance 
in  net  prices  is  indicated  by  the  comment  by  the  secretary  of  the  asso- 
ciation in  reporting  this  matter  to  its  members  in  November,  1910. 
In  this  connection  he  said : 

*    ♦    ♦    While  all  of  these  changes  represent  a  large  profit  to 
the  Oliver  Co.,  they  also  represent  a  profit  to  all  other  chilled 
plow  manufacturers    *    *    *. 
In  the  latter  part  of  1907  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers  inaugurated  a  movement  to 
bring  about  shorter  terms  for  the  various  lines  of  farm  machmery. 
The  terms  for  plow  goods  and  tillage  implements  were  referred  to  the 
National  Plow  Association.    That  association  took  up  the  mattei 
with  considerable  energy,  and  in  January,  1908,  a  resolution  was 
adopted  directing  the  secretary  to  notify  each  member  to  instruct 
his  branch-house  manager  or  agent  at  each  trade  center  to  meet  at 
once  with  similar  representatives  of  other  companies  to  consider  and 
recommend  shorter  terms  of  payment  for  1909.    Meetings  of  this 
sort  appear  to  have  been  held  by  the  jobbers'  clubs  at  Kansas  City 
and  Omaha,  and  attempts  were  made  to  interest  the  clubs  at  Minne- 
apolis and  Dallas.    It  was  conceded  that  it  was  not  convenient  for 
all  manufacturers  to  adopt  the  same  terms. 

The  president  of  the  association  pointed  out  m  April,  1908,  that 
changes  in  terms  could  not  be  effected  by  concerted  action,  but  would 
have  to  be  worked  out  gradually.  He  expressed  his  own  views  that 
each  member  should  make  shorter  terms.  .      .     t         ioaq 

All  members  present  at  a  meeting  of  the  association  m  June,  1»U», 
expressed  their  approval  of  certain  terms  that  were  discussed,  but  the 
minutes  of  the  meeting  state  that  the  terms  and  cash  discount  ap- 
proved were  not  in  any  way  to  regulate  or  have  any  bearing  on  the 

net  selling  prices.  ,,      ,  ...         ir  ^ 

In  March,  1909,  a  resolution  was  adopted  by  the  association  callmg 
upon  its  members  to  use  their  best  efforts  to  improve  the  system  of 
note  settlement  and  to  discourage  the  practice  of  carrymg  plow  goods 
or  extending  dealers'  accounts  from  fall  to  spring  terms.  At  the 
annual  meeting  of  the  association  shortly  afterwards  it  was  an- 
nounced that  the  discount  dates  had  generally  been  shortened  from 
one  to  three  months. 

At  the  annual  meeting  of  the  association  in  April,  1910,  the  secre- 
tary read  the  terms  of  payment  recommended  by  the  association  for 
that  year  and  stated  that,  on  reviewing  the  terms  in  force  by  some  of 


WHOLESALE  PMCE  ACTIVITIES. 


45 


t 


■*'i 


#    I  €t 


V^l 


the  large  jobbers  in  Omaha,  Kansas  City,  St.  Louis,  and  Indianapolis 
territories,  he  had  found  that  they  compared  very  favorably  with  the 
terms  of  the  plow  association;  that  in  some  cases  the  maturity  date 
was  one  month  later,  or  the  cash  discount  date  one  month  earlier. 
It  was  recommended  that  the  members  continue  the  1910  terms  for 
trade  in  1911  and  that  any  member  might  be  privileged  to  make 
shorter  terms. 

Even  more  strongly  perhaps  than  in  the  case  of  the  members  of  the 
National  Wagon  Manufacturers'  Association  the  members  of  the 
National  Plow  Association  seem  to  have  been  impressed  with  the  fact 
that  to  secure  harmonious  prices  among  competing  manufacturers  a 
uniform  system  of  cost  accounting  is  quite  as  necessary  as  standard 
specifications  and  standard  equipment.    Accordingly,  a  cost  commit- 
tee was  appointed  by  the  plow  association  to  prepare  a  uniform  ac- 
counting system.    Its  report  made  in  1908  was  a  detailed  explanation 
of  every  possible  item  that  it  was  considered  necessary  to  include  in 
the  computation  in  order  to  determine  actual  costs  of  goods.    These 
items  covered  not  only  the  cost  f.  o.  b.  factory,  but  also  the  cost  of 
making  sales  to  jobbers  and  to  dealers,  respectively,  as  well  as  cost  of 
freight  to  delivery  points,  when  the  freight  was  paid  by  the  manufac- 
turers.   The  report  was  urgent  in  directing  special  attention  to  the 
fact  that  ample  allowances  should  be  made  to  cover  waste  and  losses 
of  materials  and  workmanship;  that  no  item  of  unproductive  labor, 
maintenance  of  plant,  depreciation,  donations,  claims  for  breakage  or 
defective  goods,  or  even  exchange  on  customers'  checks  should  be 
overlooked.    Furthermore,  members  were  advised  to  include  interest 
on  their  investment.    The  inclusion  of  this  item  was  deemed  to  be  so 
important  that  the  cost  committee  made  a  supplemental  report  on  the 
subject  in  April,  1909.    This  recommended  that  an  interest  charge  of 
5  per  cent  on  the  capital,  surplus,  and  undivided  profits  be  included 
by  each  company  as  a  part  of  the  cost,  and  that  the  amount  of  inter- 
est paid  on  borrowed  capital  be  added  thereto.    The  original  report 
of  the  committee  had  already  been  printed  in  pamphlet  form  and  sent 
to  members  for  their  use  in  considering  the  committee's  recommenda- 
tions.   The  supplemental  report,  which  had  been  approved  by  mem- 
bers at  the  second  annual  meeting,  in  April,  1909,  also  appears  to 
have  been  sent  to  them  in  printed  form.    Members  were  not  required 
however,  to  adopt  the  cost  system  recommended.    In  the  annual  re- 
port of  the  secretary  in  April,  1909,  it  was  stated  that  several  mem- 
bers had  asserted  that  this  cost  system  alone  was  worth  all  their 
expenses  on  account  of  the  association. 

After  the  National  Plow  Association  became  a  part  of  the  National 
Implement  &  Vehicle  Association,  in  1911,  the  work  of  the  former 
association  was  continued  by  the  plow  and  tillage-implement  depart- 
ment of  the  latter,  as  shown  elsewhere.    (See  pp.  47-54.) 


46 


FARM-MACHINEBY  TRADE  ASSOCIATIONS. 


Section  4.  Activities  of  the  National  Implement  &  Vehicle  Atiociatioii 
and  its  special  trade  departments. 

National  Implement  &  Vehicle  Association.— Notwithstanding 
efforts  that  had  been  made  by  the  wagon  and  plow  associations,  and 
also  by  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers/  to  make  their  members  realize  the  ad- 
vantage of  an  accurate  knowledge  of  their  own  costs,  it  was  alleged, 
after  the  National  Implement  &  Vehicle  Association  was  formed, 
that  the  trade  in  these  lines  and  in  others  was  still  affected  by  un- 
intelligent price  competition  arising  from  a  lack  of  such  knowledge. 

To  assist  members  in  all  branches  of  the  industry  in  installing  a 
uniform  method  of  cost  accounting,  and  to  supplement  the  activities 
of  its  special  trade  departments  in  their  efforts  to  promote  harmony 
of  prices  by  securing  the  adoption  of  standard  specifications  and 
eiiuipment,  the  National  Implement  &  Vehicle  Association  main- 
tains a  committee  on  manufacturing  costs  (formerly  known  as  com- 
mittee on  costs).  At  the  annual  meeting  of  the  association  in  Octo- 
ber, 1911,  the  report  of  this  committee  attributed  a  high  proportion 
of  the  failures  in  business  to  a  lack  of  knowledge  of  costs.  The 
report  pointed  out  that,  in  many  cases,  prices  were  not  fixed  upon 
costs,  but  upon  prices  fixed  by  competitors,  regardless  of  possible 
wide  disparity  in  construction  or  values.  This,  it  was  asserted,  led 
to  price  cutting,  mutual  loss,  and  the  furtherance  of  disastrous  com- 
petition. Keference  was  made  to  the  fact  that,  although  in  some 
cases  printed  pamphlets  showing  methods  of  figuring  costs  had  been 
distributed,  yet  the  prices  that  were  still  being  made  on  certain 
machines  was  evidence  of  the  fact  that  the  principles  advocated  in 
these  pamphlets  had  not  been  put  into  general  practice.  The  con- 
cluding paragraph  of  the  report  read  as  follows : 

There  is  no  incentive  to  cut  prices  on  goods  already  sold  too 
low,  if  the  manufacturer  is  familiar  with  the  facts,  and  the  last 
word  of  the  committee  is — ^get  in  touch  with  your  cost. 

iThe  National  Association  of  Agiicnltural  Implement  k  Vehicle  Manufacturers  had 
provided  for  the  appointment  of  a  committee  on  costs  at  least  as  early  as  1905,  for  at 
the  annual  meeting  of  the  association  in  that  year  a  committee  on  costs  'made  a  report 
to  the  members,  calling  attention  to  the  failure  of  many  of  the  members  to  maintain  an 
adequate  system  of  cost  accounting  and  suggesting  a  cost  formula  of  general  applicftion, 
which  was  recommended  to  members  for  their  adoption.  The  association  ordered  this 
report  to  be  printed.  At  the  annua)  meeting  of  the  association  in  November,  1910,  how- 
ever, the  chairman  of  the  committee  expressed  some  doubt  as  to  the  usefulness  of  such 
a  committee  in  the  work  of  the  association  (which  covered  various  branches  of  the  in- 
dustry). He  reported  that  a  letter  had  been  addressed  to  the  200  active  members  of  the 
association,  to  which  58  replies  had  been  received.  This  letter  aslied  whether  the  member 
addressed  had  a  satisfactory  cost  system  and  whether  he  would  be  willing  to  change  if  a 
satisfactory  uniform  system  could  be  devised.  The  replies  were  such  that  the  chairman 
asserted  that  it  would  be  useless  to  attempt  anything  along  the  line  of  a  uniform  cost 
system  for  the  members  of  the  association,  since  results  would  not  be  commensurate  with 
the  work  involved  in  such  an  undertaking.  He  also  stated  that  he  agreed  that  a  cost 
eonunittee  had  no  standing  or  place  in  an  organization  like  the  National  Association  of 
Agricultural  Implement  &  Vehicle  Manufacturers,  and  he  recommended  the  dlscontlna- 
ance  of  the  committee,  or  that  the  committee  be  continued  only  in  an  advisory  capacltj. 


WHOLESALE  PRICE  ACTIVITIES. 


47 


]r 


% 


*f 


The  obvious  motive  behind  these  cost-educational  efforts  was  to 

advance  prices. 

This  recommendation  of  the  cost  committee  was  followed  in  De- 
cember, 1911,  by  a  request  to  that  committee  from  the  executive  com- 
mittee of  the  association  to  formulate  a  list  of  cost  items,  essential 
in  making  up  complete  costs,  to  be  printed  and  distributed  to  the 
members  of  the  association.  The  list  thus  prepared  was  a  revision 
of  the  cost  system  which  had  been  adopted  by  the  plow  association 
a  few  years  earlier  (see  p.  45),  and  is  shown  in  full  as  Exhibit  29 
on  page  323  of  this  report.  In  submitting  the  revised  list  at  the 
annual  meeting  of  the  association  in  October,  1912,  the  committee 
said: 

This  plan  was  devised  by  a  committee  of  the  National  Plow 
Association  of  which  your  present  conmiittee  was  a  part.  It 
has  been  used  with  much  success. 

While  this  system  was  applied  to  tillage  implements,  yet  its 
fundamentals  apply  to  all  lines  and  with  the  necessary  adjust- 
ment of  details  to  meet  conditions  should  be  of  assistance  to 
many.  It  is  entirely  unnecessary  for  your  committee  to  present 
further  argument  as  to  the  necessity  of  using  a  cost  system  in 
modern  business,  but  we  would  urge  that  your  present  system 
be  tested  on  the  essential  points  brought  out  in  the  foregoing. 

Departments  of  the  National  Implement  &  Vehicle  Associa- 
tion.— Since  the  early  part  of  1911,  the  special  trade  departments  of 
the  National  Implement  &  Vehicle  Association  have  continued  the 
work  of  standardization  and  the  discussion  of  costs  and  prices,  for- 
merly conducted  by  predecessor  associations. 

The  National  Association  of  Grain  Drill  Manufacturers,  which 
became  the  grain-drill  and  seeder  department  of  the  National  Imple- 
ment &  Vehicle  Association,  had  apparently  made  less  progress  along 
the  line  of  standardization  than  either  the  farm-wagon  or  the  plow 
association.  In  May,  1913,  however,  the  grain-drill  department  took 
up  the  matter  of  standardizing  the  equipment  for  certain  grain 
drills,  especially  to  determine  what  parts  of  the  equipment  should  be 
considered  as  extras.  A  proposal  to  eliminate  a  number  of  unneces- 
sary sizes  of  grain  drills  and  special  equipment  was  favorably  re- 
ceived. At  another  meeting  of  the  grain-drill  department  in  June, 
1913,  the  conclusion  was  reached  that  close  attention  should  be  given 
to  costs  of  production  and  that  increasing  costs  demanded  a  readjust- 
ment of  selling  prices. 

At  the  first  meeting  of  the  plow  and  tillage-implement  department 
of  the  association,  in  May,  1911,  the  standard  equipment  which  had 
been  adopted  by  the  National  Plow  Association  was  approved  and 
the  seci'etary  was  instructed  to  notify  all  manufacturers.  In  con- 
sidering the  subject  of  standard  equipment,  the  question  of  furnish- 


48 


FABM-MACHINEBY  TRADE  ASSOCIATIONa 


ing  hard  oilers  with  disc  harrows  was  brought  up,  and  the  consensus 
of  opinion  was  that,  if  furnished,  they  should  be  charged  for  as  an 
extra.  The  secretary  was  instructed  to  see  the  International  Har- 
vester Co.  in  regard  to  this,  and  also  with  regard  to  furnishing 
doubletrees  and  neck  yokes,  and  automatic  markers  with  com 
planters,  and  to  report  to  the  department  thereon.  It  was  ordered 
that  copies  of  the  cost  sheets  of  one  factory  for  wood-bar  harrows, 
which  had  been  checked  by  several  members  and  found  to  correspond 
approximately  with  their  own,  be  sent  to  all  makers  of  wood-bar 
harrows.  The  question  of  equipment  for  listers  was  raised,  and  the 
secretary  was  instructed  to  write  one  concern  which  was  imderstood 
to  be  furnishing  extra  plates  in  excess  of  the  standard  equipment. 
The  secretary  was  also  directed  to  take  up  the  matter  of  standardiza- 
tion for  plow-beam- billets  with  several  steel  companies.  Further- 
more, the  executive  committee  was  instructed  to  prepare  and  furnish 
all  members  with  cost  sheets,  bringing  costs  up  to  date,  on  plows, 
harrows,  cultivators,  and  corn  planters. 

At  another  meeting  of  the  plow  and  tillage-implement  department, 
in  May,  1912,  the  matter  of  standard  equipment  was  discussed  at 
some  length.  It  was  voted  that  hard  oilers  be  considered  as  part  of 
the  standard  equipment  for  disc  harrows  at  the  discretion  of  the 
manufacturers.  It  was  thought  that  advances  in  the  cost  of  mate- 
rials, and  the  prospect  of  further  advances,  emphasized  the  necessity 
of  at  least  maintaining  the  existing  prices  of  implements.  A  com- 
plaint was  read  from  one  of  the  members  relative  to  the  sale  of  6  and 
8  shovel  cultivators  in  Indiana  and  Michigan.  It  was  the  sense  of 
the  members  that  the  difference  between  6  and  8  shovel  cultivators' 
heavy  extension  gangs,  as  shown  by  the  actual  cost,  should  be  at 
least  $1,  and  the  difference  between  6  and  8  shovel  light  gangs,  such 
as  the  Eagle  claws  or  curved  beams,  should  be  50  cents,  and  that  this 
recommendation  should  be  included  in  the  standard  equipment  rec- 
ommendations. 

Each  member  present  at  a  meeting  of  the  plow  department,  held  in 
April,  1913,  expressed  himself  regarding  conditions  in  the  material 
markets  and  in  the  trade  for  the  ensuing  year.  It  was  voted  that 
manufacturing  conditions  required  that  contracts  for  materials 
should  be  made  to  cover  a  period  of  12  months  ending  July  1  of  any 
year.  The  prices  of  individual  commodities  were  considered  item  by 
item,  and  the  conclusion  was  reached  that  there  was  a  general 
tendency  for  prices  to  increase,  which  was  thought  to  indicate  the 
probable  necessity  for  reviewing  the  figures  of  manufacturing  costs. 
Another  meeting  was  held  a  month  later  (May,  1913),  at  which  the 
steel  situation  was  discussed.  The  members  seem  to  have  thought 
that,  in  view  of  the  circumstances  then  surrounding  the  implement 
business,  they  deserved  greater  consideration  from  the  steel  pro- 


>- 


WHOLESALE  PBICE  ACTIVITIES. 


49 


m 


ducers  in  the  matter  of  prices.  The  opinion  was  expressed  that  some 
advance  in  implements  would  be  necessary  to  cover  increased  costs, 
but  it  was  thought  that  this  should  be  measured  conservatively  if 
volume  of  trade  were  to  be  maintained.  The  matter  of  prices  for 
implements  for  1913-14  was  also  discussed,  one  member  taking  the 
position  that  the  conditions  surrounding  each  business  differed  suffi- 
ciently to  make  it  unsafe  to  follow  a  competitor,  either  as  to  prices 
or  terms,  without  an  accurate  knowledge  of  one's  own  situation.  It 
was  stated  that  to  improve  the  situation  it  was  necessary  for  the 
manufacturers  to  act,  and  that  if  all  were  to  act  simultaneously  all 
necessary  changes  would  be  made  without  disturbance  to  the  trade, 
Y'  and  the  results  would  be  exceedingly  gratifying. 

At  a  meeting  of  the  farm-wagon  manufacturers  held  April  20, 
1911,  at  which  the  farm-wagon  department  of  the  National  Imple- 
ment &  Vehicle  Association  was  organized,  a  general  discussion  took 
place,  revealing  a  practically  unanimous  belief  in  the  necessity  for 
the  maintenance  of  existing  prices,  although  it  was  claimed  that 
higher  prices  were  justified  by  manufacturing  costs  and  expenses. 
The  discussion  of  costs  was  postponed  until  a  later  meeting,  at  which 
fuller  information  would  be*  available  concerning  work  along  cost 
lines  then  being  carried  on  at  the  factories  of  members.  The  next 
meeting  of  this  department,  of  which  there  is  any  record,  took  place 
June  5,  1912.  There  were  present  representatives  of  11  concerns, 
which  it  was  claimed  represented  75  per  cent  of  the  farm-wagon  out- 
put of  the  United  States.  It  was  unanimously  agreed  that  prices 
ought  to  be  higher  and  that  none  of  those  present  would  take  orders 
at  the  existing  prices  after  December  31,  1912.  In  September,  1912, 
a  compilation  of  replies  to  certain  questions  relative  to  conditions 
in  the  farm-wagon  business  was  read  and  discussed.  This  showed 
that  17  out  of  23  companies  had  made  no  general  change  in  selling 
prices  during  1910,  1911,  and  1912.  Twenty  expressed  the  opinion 
that  prices  ought  to  be  higher.  After  discussion  it  was  voted  to  rec- 
ommend that  after  January  1, 1913,  wagons  should  not  be  furnished 
at  less  than  a  5  per  cent  advance  over  the  existing  prices,  and  that  no 
orders  for  shipment  after  April  1,  1913,  should  be  taken  except  at  a 
further  advance  of  at  least  5  per  cent.  At  the  next  meeting,  in 
November,  1912,  this  resolution  was  reaffirmed,  but  the  date  (April 
1)  was  changed  to  June  1. 

The  members  of  the  wagon  department  also  decided  to  take  care 
of  the  alleged  increase  in  costs  by  greater  economies  in  manufacture, 
especially  to  eliminate  certain  sizes  of  wagons,  in  order  to  curtail 
expense  incident  to  variety  in  detail  of  manufacture.  (See  p.  52.) 
In  June,  1912,  the  matter  of  eliminating  certain  wheel  heights  and 
substituting  lower  ones  was  discussed,  the  secretary  being  instructed 

08248*— 15 i 


•>-* 


50 


FABM-MACHINEBY   TRADE  ASSOCIATIONS. 


to  ascertain  the  views  of  the  members.  The  problem  of  standard- 
izing wide  tires  was  also  taken  up  at  this  time,  A  letter  was  sent 
out  to  all  members  of  the  department,  manufacturers  and  dis- 
tributors as  well,  asking  whether  they  would  agree  on  certain  speci- 
fied widths  for  wide  ims.  The  returns  showed  23  favorable  replies 
and  2  adverse  ones.  A  committee  was  appointed  to  canvass  the 
matter  further,  apparently  to  look  into  State  laws  relative  to  wide 
tires,  with  the  object  of  establishing  standard  sizes.  In  the  mean- 
time the  net  price  list  for  tires,  which  had  been  issued  in  August, 
1904,  and  recommended  to  the  members  of  the  National  Wagon 
Manufacturers'  Association  for  adoption  in  1907,  was  again  reissued 
by  the  farm-wagon  department  of  the  National  Implement  & 
Vehicle  Association  in  May,  1911.  (Sec  Exhibit  15,  p.  271.)  The 
prices  recommended  in  this  list  were  intended  for  use  as  net  prices 
in  connection  with  price  lists  issued  by  the  several  manufacturers. 
They  were  based  on  tires  for  standard  wheels  with  no  reduction  on 

wheels  of  less  height. 

In  June,  1912,  the  wagon  department  appointed  a  committee  to 
recommend  the  proper  basis  for  a  uniform  gross  list  for  extra  and 
repair  parts  for  farm  wagons.    The  committee,  consisting  of  the 
representatives  of  some  of  the  principal  manufacturers,  confined  its 
labors  to  the  size  of  wagons  commonly  used  throughout  the  Middle 
West,  the  consensus  of  opinicMi  being  that  a  high  list  should  be 
adopted  giving  the  dealer  a  "  good  big  profit."    In  November  the 
committee  presented  its  report  to  the  wagon  department  of  the  asso- 
ciation (see  Exhibit  16,  p.  272),  showing  not  only  the  gross  lists 
of  six  leading  companies  with  the  discount  of  each,  but  also  a  gross 
list  recommended  for  adoption  by  the  members,  which  it  was  pointed 
out,  if  discounted  50  per  cent,  wotdd  result  in  net  prices  that  would 
show  a  fair  margin.    The  committee  was  careful  to  state,  however, 
that  it  did  not  recommend  a  discount  of  50  per  cent,  or  any  other 
discount,  but  did  suggest  the  adoption  of  the  gross  list,  each  manu- 
facturer to  determine  the  proper  discount  to  apply  after  investi- 
gating his  own  costs  in  the  regular  way.    It  also  recommended  a 
similar  list  for  mountain-wagon  parts  by  adding  30  to  40  per  cent 
to  the  list  recommended,  which  would  enable  the  quoting  of  a  uni- 
form trade  discount  applicable  to  both  lists.    Shortly  afterwards  one 
of  the  leading  factories  belonging  to  the  farm- wagon  department,  in 
sending  out  to  its  branch  houses  new  lists  based  upon  that  recom- 
mended by  the  wagon  department,  announced  a  discount  of  50  per 
cent  to  dealers  and  stated  that  the  principal  competing  manufacturers 
had  agreed  to  adopt  a  list  that  would  net  them  50  per  cent  of  the  list 

prices. 

Impressed  with  the  necessity  of  having  an  accurate  knowledge  of 

the  difference  between  the  amounts  of  money   paid   out   and  the 


t\ 


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WHOLESALE  PRICE  ACTIVITIES. 


51 


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amounts  taken  in,  for  determining  whether  business  was  conducted 
at  a  profit  or  at  a  loss,  the  president  of  the  farm- wagon  department, 
who  is  the  head  of  a  prosperous  factory,  and  who  has  been  active 
in  the  association  work  for  years,  prepared  a  detailed  cost  formula 
in  1913,  which  was  asserted  to  be  especially  adapted  to  the  need  of 
the  farm- wagon  industry.  The  items  of  general  and  selling  expense 
in  this  formula  were  intended  to  be  similar  to  the  deductions  from 
gross  income  made  by  manufacturing  corporations  in  making  re- 
turns of  net  annual  income  to  the  United  States  Internal  Revenue 
Bureau  under  the  Federal  corporation-tax  law.  The  only  item  for 
interest  shown  to  be  included  in  this  formula  as  a  cost  of  the  busi- 
ness was  that  paid  on  bonds  or  other  indebtedness  to  an  amount  not 
exceeding  the  amount  of  paid-up  capital  stock  outstanding  at  the 
close  of  the  year.  Allowance  for  repairs  to  buildings  and  equip- 
ment, and  for  guaranty  or  warranty  expenses,  were  specifically  in- 
cluded in  the  factory  expense.  The  costs  reported  for  materials 
included  freight,  probably  an  allowance  for  losses  and  waste,  and 
perhaps  an  interest  charge  for  carrying  stock.  It  is  not  unlikely 
that  similar  allowances  for  lost  and  wasted  time  were  also  included 
in  costs  of  productive  labor,  although  they  were  not  shown  in  detail. 
Charities  and  contributions,  cash  discounts,  shortage  expense  and 
allowances,  general  expense  not  otherwise  classified,  bad  debts  and 
losses,  and  depreciation  on  buildings  and  equipment  were  reckoned 
as  part  of  the  expenses. 

When  this  formula  was  submitted  to  the  members  of  the  farm- 
wagon  department,  in  June,  1913,  it  aroused  considerable  interest. 
The  method  of  handling  certain  costs  created  some  discussion,  spe- 
cial attention  being  apparently  directed  to  what  would  be  the  most 
logical  method  of  charging  interest  on  investment  in  materials. 

In  presenting  this  formula  the  president  of  the  wagon  department 
pointed  out  that  "  the  very  great  benefit  in  having  associations  make 
comparisons  is  in  seeing  how  the  costs  vary  in  the  different  plants 
and  what  the  averages  of  the  comparative  cost  are.  In  this  way  the 
figures  of  one  plant  are  a  check  on  the  figures  of  the  other."  The 
"paramount  importance"  of  similar  or  common  specifications  for 
comparing  the  costs  at  different  factories  was  also  explained. 

For  purposes  of  comparison,  members  of  the  department  pre- 
sented the  costs  of  their  concerns  based  upon  a  wagon  of  the  size 
in  most  general  use.  In  reporting  the  result  of  this  comparison  the 
minutes  of  the  department  state  that  the  figures  showed  a  wide  dis- 
crepancy, indicating  that  cost  methods  of  all  members  were  not  uni- 
form, and  that  there  was  need  of  such  imiformity  as  had  been  pro- 
posed by  the  president  of  the  department.  It  was  the  prevailing 
opinion  that  useful  facts  could  not  be  obtained  until  a  proper  basis 
of  comparison  was  arrived  at.    It  was  suggested  that  a  firm  of  cost 


^1 


52 


FABM-MACHINEBY  TBADE  ASSOCIATIONS. 


accountants  be  employed  to  visit  various  plants  to  take  the  specifi- 
cations  of  a  few  standard  wagons  and  check  up  costs  on  those  wagons 
from  the  systems  in  use,  according  to  the  formula  offered  by  the 
president.  Accordingly,  it  was  voted  that  the  president  of  the  de- 
partment enter  into  an  arrangement  of  this  sort,  the  compilation 
to  be  presented  at  a  meeting  of  the  farm-wagon  department,  and 
the  cost  to  be  borne  by  the  department. 

The  report  of  the  accountants  on  the  cost  of  standard  wagons  at 
the  factories  of  five  of  the  largest  manufacturers  was  made  at  a 
meeting  of  the  department  held  in  September,  1913.  The  minutes 
of  this  meeting  state  that  the  information  proved  to  be  interesting 
and  valuable,  especially  in  view  of  the  statement  that  the  costs  were 
built  up  in  the  same  manner  from  the  same  basis  at  every  plant.  It 
was  asserted  that  the  figures  were  undoubtedly  a  surprise  to  many, 
in  that  they  showed  an  advance  over  figures  previously  submitted. 
It  was  held  that  this  fact  constituted  a  very  forcible  suggestion  to 
every  manufacturer  that  the  most  important  step  to  take  before 
maldng  up  his  selling  prices  for  1914  was  to  very  carefully  check 
over  his  costs  on  the  basis  of  this  report. 

At  this  meeting  considerable  attention  was  given  to  the  situation 
with  respect  to  a  standard  1-horse  wagon  shipped  into  the  southern 
and  southeastern  sections  of  the  United  States.  It  was  stated  that 
the  difference  between  the  prevailing  selling  prices  in  that  territory 
for  wagons  made  largely  by  local  manufacturers  and  the  actual  costs 
to  those  shipping  into  that  section  was  so  small  as  to  emphasize 
strongly  the  need  of  giving  these  conditions  special  attention. 

In  further  commenting  upon  the  report  of  the  accountants,  the 
minutes  of  the  department  made  the  following  statement : 

It  seemed  to  be  the  consensus  of  opinion  that  while  in  making 
up  future  selling  prices  these  increased  costs  could  not  be  ab- 
sorbed out  of  profits,  yet  would  have  to  be  taken  care  of  either 
by  additions  to  present  selling  prices  or  economies  in  manufac- 
ture that  would  offset  it.  The  latter  course  seemed  to  be  more 
generally  favored,  but  could  hardly  be  accomplished  except 
through  standardization  and  elimination,  for  the  costs  of  pro- 
ducing wagons  under  present  conditions  and  present  trade 
demands  would  admit  of  little  economy,  yet  if  several  sizes  of 
wagons  really  unnecessary  at  this  time  could  be  eliminated  and 
certain  parts  of  wagons  brought  to  a  common  standard  much 
economy  would  result,  for  every  size  of  wagon  duplicates  the 
large  variety  of  detail  in  manufacture. 

During  1914  members  of  the  grain-drill,  farm-wagon,  and  plow 
and  tOlage  implement  departments  of  the  National  Implement  & 
Vehicle  Association  made  some  progress  in  plans  for  standardizing 
the  factory  products  of  their  members,  especially  in  the  direction  of 
reducing  the  variety  of  sizes  and  types  and  retaining  certain  sizes  and 


^\ 


^ 


m 


,,.1^ 

« 


/ 


WHOLESALE  PRICE  ACTIVITIES. 


53 


^ 


' 


types  as  standard.  At  the  annual  meeting  of  the  National  Implement 
&  Vehicle  Association  in  October,  1914,  its  committee  on  manufactur- 
ing costs  strongly  urged  the  standardization  of  cost  accounting.  In 
this  connection  the  committee  pointed  out  that — 

with  the  adoption  of  a  standard  system  of  cost  accounting,  the 
comparisons  of  costs  among  the  members  of  an  association  not 
only  become  an  easy  matter,  but  is  one  that  will  imdoubtedly 
bring  most  profitable  results.    *     *    * 

In  order  to  bring  about  such  results  among  the  members  of  the 
association  the  committee  recommended  the  establishment  of  a  cost- 
accounting  bureau  in  charge  of  a  competent  man  acting  under  the 
direction  of  the  executive  committee  through  the  secretary.  The 
committee  expressed  its  opinion  of  the  functions  of  such  a  bureau  as 
follows : 

1st.  To  perfect  cost  systems  applicable  to  the  various  lines, 
with  a  set  of  blanks  to  be  used  in  compiling  cost  figures,  in  such 
a  way  that  all  reports  from  any  given  industry  would  be  upon  a 
uniform  basis. 

2d.  To  have  submitted  to  it,  from  time  to  time,  tabulations  of 
costs  on  certain  standard  productions  by  the  members  of  the 
association,  for  the  purpose  of  making  comparisons  and  averages, 
with  a  view  of  proving  the  correctness  of  the  cost  figures,  and 
where  the  costs  submitted  by  some  member  seem  out  of  line,  to 
go  into  the  details  with  such  member  and  endeavor  to  correct  the 
apparent  inaccuracy. 

3d.  To  cooperate  with  those  members  who  have  no  cost  systems 
in  establishing  this  important  feature  in  their  organizations. 

The  desirability  of  installing  a  bureau  or  department  in  charge  of 
an  expert  to  handle  both  manufacturing  and  selling  costs,  including 
the  information  on  cost  accoimting  furnished  to  retail  dealers,  had 
already  been  referred  to  by  the  president  of  the  National  Implement 
&  Vehicle  Association  in  his  opening  address  at  the  first  session  of 
this  convention  of  the  association.  In  referring  to  the  matter  he 
pointed  out  that  this  work  was  being  seriously  handicapped  by  not 
having  some  one  to  devote  his  whole  time  to  it. 

On  the  subject  of  price  discussions  or  the  formation  of  price  lists 
by  the  association  the  secretary  in  a  recent  letter  to  the  Bureau  of 
Corporations  called  attention  to  an  excerpt  from  the  minutes  of  a 
meeting  of  the  executive  committee  held  June  3,  1914.  This  excerpt 
reads  as  follows: 

One  of  the  members  of  the  committee  stated  that  any  discussion 
concerning  prices  would  in  his  judgment  be  clearly  contrary  to 
existing  laws,  and  that  if  it  was  ever  considered  to  be*  within  the 
function  of  this  or  any  other  committee  in  the  association  to  dis- 
cuss or  act  upon  that  subject,  he  would  be  compelled  to  withdraw. 
The  committee  unanimously  concurred  that  discussion  or  action 
on  prices  was  entirely  contrary  to  the  purposes  of  the  organiza- 
tion and  would  not  be  permitted.    The  point  was  raised  not 


64  FARM-MACHINERY  TRADE  ASS0CUTI0N8. 

because  of  any  actions  previously  taken,  or  proposed  for  the 
future,  but  because  it  was  deemed  wise  to  have  a  complete  under- 
standing on  the  subject.  It  was  brought  out,  however,  that  our 
attorneys  had  advised  that  under  certain  conditions  it  was  legal 
to  formulate  uniform  ^gross  price  lists,  but  it  was  the  unanimous 
conclusion  of  the  comfmittee  that  no  discussions  or  any  action  on 
same  now  or  in  the  future  would  be  permitted. 

In  considering  matters  of  standardization,  it  was  decided  that 
no  consideration  be  given  or  reference  made  to  the  charging  extra 
for  nonstandard  equipment. 

4  * 

Section  6.  Sigmfieanoe  of  cost  system  in  relation  to  selling  prices. 

That  the  cost-accounting  movement  with  its  supplementary  activi- 
ties in  respect  to  standard  specifications,  equipment,  etc.,  has  been 
adopted  by  the  members  of  the  National  Implement  &  Vehicle  As- 
sociation as  a  means  of  establishing  a  higher  price  level  and  as  a 
method  by  which  to  establish  an  approximate  standard  of  prices 
for  competing  concerns  admits  of  no  doubt.  The  computation  of 
cost  includes  interest,  not  only  on  borrowed  money  but  also  upon  the 
investment,  besides  every  possible  item  of  expense,  as  well  as  allow- 
ances for  all  services  rendered.  This  figure  which  is  denominated 
"cost"*  is  obviously  the  equivalent  of  a  profit-yielding  price.  The 
fundamental  idea  of  cost  in  cost  accounting  comprises  outlay  and 
waste  and  excludes  any  element  of  profit.  The  question  whether  a 
price  computed  in  this  manner  is  high  or  low  is  quite  another  matter, 
depending  principally  upon  the  rate  at  which  the  interest  is  com- 
puted. 

In  the  present  instance  this  question  has  more  than  an  academic 
interest.  If  the  laws  of  the  United  States  forbid  direct  regulation 
of  prices  by  competitors  among  themselves  as  agreements  in  restraint 
of  trade,  it  should  be  determined  whether  they  do  not  also  forbid  the 
regulation  of  prices  by  indirection,  through  concerted  action  of  com- 
petitors in  adopting  a  uniform  system  of  cost  accounting,  in  ex- 
changing information  in  regard  to  their  costs,  and  through  recom- 
mendations to  fix  prices  in  accordance  with  the  cost.  The  adoption 
of  common  standards  of  cost  and  the  exchange  of  information  in 
regard  thereto  is  mainly  to  secure  a  similar  course  of  action  on  the 
part  of  each  member. 

While  prices  of  different  makers  of  similar  machines  under  this 
system  tend  to  be  approximately  the  same,  yet  the  fact  that  the 
prices  of  each  are  based  upon  his  own  costs,  even  though  compari- 
sons are  made,  theoretically,  at  least,  contemplates  differences  in 
prices  to  correspond  to  differences  in  costs.  There  would  be  a  tend- 
ency toward  the  elimination  of  such  differences,  however,  unless 
there  were  differences  in  quality  corresponding  to  the  differences  in 

»Tlie  recommendations  of  the  National  Implement  ft  Vehicle  Association  as  contained 
tn  Its  cost  pamphlet  state  that  the  inclusion  of  the  Item  of  Interest  Is  optional.  (See 
Exhibit  29.  p.  323.) 


WHOLESALE  PRICE  ACTIVITIES. 


55 


/ 


0 


cost,  in  which  case  the  prices  would  be  substantially  equalized  by 
this  method.  The  principle,  however,  of  such  a  determination  of 
prices  through  costs  is  not  in  harmony  with  the  principle  of  com- 
petitive prices.  It  is  evident,  moreover,  that  the  plan  of  meeting 
to  discuss  and  compare  costs  computed  on  this  basis  involves  the 
possibility  of  agreements  in  respect  to  adoption  of  prices  based  upon 
the  highest  costs  reported,  or  of  agreements  to  add  a  high,  uniform, 
arbitrary  rate  of  profit,  or  even  direct  agreements  on  prices. 

The  question  to  be  emphasized  here  is  whether  competing  manu- 
facturers should  be  permitted  to  establish  and  maintain  even  ap- 
proximately uniform  prices  by  concerted  action  in  comparing  costs ; 
and  whether  such  proceedings  are  free  from  the  dangers  and  objec- 
tions incident  to  more  direct  methods  of  fixing  uniform  prices  among 
competitors. 

Apart  from  this  aspect  of  price  regulation,  it  may  be  a  proper 
function  of  trade  associations  to  assist  members  to  adopt  a  proper 
system  of  cost  accounting  that  shall  accurately  measure  amounts 
actually  expended  for  or  chargeable  to  production.  The  adoption 
of  standard  specifications,  recommended  by  associations,  is  often  of 
advantage  to  both  manufacturers  and  purchasers  and  tends  to  pro- 
mote economies  in  industry  and  commerce.  Frequently,  however,  the 
purpose  in  establishing  standard  or  uniform  equipment  is  to  deprive 
the  purchaser  of  some  convenience  that  he  has  formerly  received 
without  any  corresponding  reduction  in  price.  The  meeting  of  com- 
petitors to  compare  and  discuss  costs  as  a  basis  for  prices  is,  how- 
ever, as  already  stated,  peculiarly  susceptible  of  being  used  as  a  cloak 
for  conferences  to  make  agreements  on  prices. 

Section  6.  Activities  of  the  National  Association  of  Thresher  Mannfac- 

turers. 

So  far  as  shown  by  the  records  now  available,  the  thresher  manu- 
facturers' association  paid  less  attention  than  the  wagon  manufac- 
turers to  costs  and  standard  specifications  as  a  basis  for  determining 
prices,  nor  did  they,  like  the  plow  manufacturers,  adopt  a  schedule  of 
gross  prices. 

In  1904,  however,  a  committee  of  the  thresher  manufacturers'  asso- 
ciation, which  had  taken  up  and  compared  manufacturing  and  selling 
costs  of  the  various  sizes  and  kinds  of  threshing  machinery,  reported 
a  schedule  of  net  "amounts"  below  which,  in  the  opinion  of  the 
committee,  threshing  machines  could  not  be  manufactured  and  put 
upon  the  market  except  at  a  loss.  Twenty-four  sizes  of  separators 
were  listed  and  14  sizes  of  tractor  engines,  while  "  amounts "  were 
also  shown  for  weighers  and  baggers,  self-feeders,  horse  powers,  at- 
tached swinging  stackers,  steel  tanks,  etc.  Details  of  the  method 
used  in  determining  these  amounts  were  not  explained.  This  sched- 
ule of  net  "  amounts  "  suggested  in  1904  was  readopted  at  the  annual 


i 


56 


FABM-MACHINEKY   TRADE   ASSOCIATIONS. 


meetings  in  1908  and  again  in  1909  and  1910,  with  slight  modifi- 
cations. In  1909  one  or  two  concerns  which  were  reported  to  have 
engaged  in  considerable  price  cutting  were  asked  to  reconsider  their 

« 

The  National  Association  of  Thresher  Manufacturers  has  also 
kept  up  an  agitation  against  price  concessions  involved  in  the  prac- 
tice of  receiving  old  machines,  in  excess  of  their  value,  in  payment 
for  new  machinery,  and  also  against  concessions  made  by  paymg 
freight  charges,  which  the  association  believed  should  be  paid  by 
customers.  It  is  claimed  that  this  agitation  at  the  association  meet- 
ings has  been  productive  of  great  improvement  from  the  standpomt 
of  the  members.  Thresher  manufacturers  generally  use  high  list 
prices  with  high  commissions.  The  association  recommends  the 
adoption  of  lower  list  prices  and  lower  commissions,  corresponding 
more  nearly  with  the  prices  actually  received  and  commissions  ac- 
tually paid.  It  is  urged  that  this  would  not  only  result  m  the 
establishment  of  more  satisfactory  relations  with  dealers,  but  would 
also  bring  about  greater  stability  in  prices.  .        ^     x 

The  selling  price  of  the  pneumatic  stacker  (which  is  an  important 
part  of  the  threshing  outfit)  is  fixed  by  the  license  contracts  of  the 
different  manufacturers  with  the  Indiana  Manuf acturmg  Co.  (bee 
Chap.  V.) 


c 


/ 


• 


CHAPTER  m. 
EFPOKTS  OF  MANUFACTUEEES'  ASSOCIATIONS  TO  REDTTCE  COSTS. 

Section  1.  Introduction. 

Legal  and  practical  limitations  upon  the  activities  of  associations 
in  respect  to  prices  have  caused  much  attention  to  be  given  by  the 
associations  to  the  possibilities  of  securing  increased  profits  by 
reducing  costs.  The  efforts  of  the  manufacturers'  associations  in 
this  direction  have  been  mainly  to  reduce  factory  costs  through  the 
adoption  of  standard  specifications  for  materials;  to  secure  the 
lowest  possible  freight  rates;  to  reduce  the  costs  of  fire  insurance; 
to  limit  credit  risks  and  improve  the  financial  condition  of  dealer- 
customers  ;  and  to  reduce  or  eliminate  various  items  of  expense  inci- 
dent to  the  method  of  selling  goods  through  retail  dealers.  The 
federated  associations  of  dealers  have  also  taken  an  active  interest 
in  some  of  these  matters,  and  at  times  they  have  cooperated  with 
the  manufacturers'  associations,  especially  in  respect  to  freight 
charges  and  the  reduction  of  selling  costs.  These  topics  are  dis- 
cussed in  some  detail  in  succeeding  sections  of  this  chapter. 

So  far  as  shown  by  the  available  records,  the  manufacturers'  asso- 
ciations have  made  no  systematic  effort  to  regulate  one  of  the  princi- 
pal costs  of  manufacture,  namely,  wages  paid  to  employees.  Little 
or  no  effort  appears  to  have  been  made  to  aid  members  having  differ- 
ences with  labor  organizations. 

In  1901  the  handling  of  labor  difficulties  was  proposed  as  a  field 
of  activity  for  the  National  Association  of  Agricultural  Implement 
&  Vehicle  Manufacturers,  but  the  executive  committee  decided  that 
it  could  not  see  its  way  clear  to  take  up  the  subject.  Plans  of  strike 
insurance  had  been  discussed,  but  apparently  with  the  same  result. 
The  passage  of  legislation  to  regulate  the  hours  of  labor  has  been 
opposed  as  class  legislation,  and  in  March,  1911,  the  members  of  the 
executive  committee  of  the  National  Implement  &  Vehicle  Associa- 
tion voted  that  the  association  should  join  the  National  Council  for 
Industrial  Defense  ^  if  it  could  be  done  without  financial  obligation, 


.  y  -• 


»Thls  organization  was  established  by  the  National  Association  of  Manufacturers,  the 
object,  as  stated  by  its  officers,  being  to  provide  "  a  separate  and  specific  medium  througli 
which*  constant,  watchful  attention  might  be  given  to  the  matter  of  vicious  class  legisla- 
tion which  is  ever  being  urged  in  the  Federal  Congress  by  organized  labor."  (Page  3841. 
vol.  4,  Hearings  on  Lobby  to  Influence  Legislation,  pursuant  to  S.  Res.  92,  63d  Cong.. 
let  Sess.)  gj 


68 


FARM-MACHINERY  TRADE  ASSOCUTIONS. 


but  subsequently  affiliation  with  this  organization  was  left  to  each 
member  to  determine  for  himself.  Moreover,  the  reports  of  the  com- 
mittee on  State  legislation  have  at  times  referred  adversely  to  bills 
introduced  in  various  State  legislatures  fixing  hours  of  labor,  and  in 
February,  1912,  the  members  of  the  association  were  urged  to  write 
their  Senators  and  Representatives  in  Congress  in  opposition  to  a  bill 
providing  for  an  eight-hour  day  for  work  done  for  the  United  States, 
in  view  of  the  effect  its  passage  would  have  as  a  precedent. 

In  October,  1912,  the  report  of  the  committee  on  national  legisla- 
tion also  referred  to  the  status  of  several  bills  that  had  been  intro- 
duced in  Congress  in  the  interest  of  labor,  including  the  bill  provid- 
ing for  the  eight-hour  law,  anti-injunction  bills,  and  bills  relating  to 
trial  by  jury  in  contempt  cases.  It  was  recommended  that  members 
give  strict  attention  to  such  matters  and  call  the  attention  of  the 
committee  to  any  bills  of  interest  to  manufacturers  in  the  lines  repre- 
sented by  the  association. 

*  The  members  of  the  National  Implement  &  Vehicle  Association 
have  also  advocated  the  passage  of  legislation  to  promote  vocational 
training — a  measure  also  favored  by  the  National  Business  League 
of  America.  (See  p.  91.)  One  phase  of  the  relations  between  manu- 
facturers and  their  employees  that  has  received  consideration  in 
recent  years  is  the  matter  of  industrial  indemnity  legislation,  dis- 
cussed in  Chapter  IV. 

Section  2.  Standardization  of  materiali. 

National  Wagon  Manufacturers'  Association. — ^Efforts  to  re- 
duce costs  by  the  adoption  of  common  or  standard  specifications  for 
materials  purchased  in  the  rough  or  in  finished  form  may  be  said  to 
have  been  systematically  be^n  in  1904  by  the  National  Wagon  Man- 
ufacturers' Association,  which  had  just  been  reorganized  as  the  re- 
smlt  of  the  report  of  a  committee  appointed  to  devise  a  plan  for  the 
improvement  of  the  business.  (See  p.  28.)  It  was  asserted  that  sub- 
stantial savings  could  be  effected  if  uniform  specifications  could  be 
established  and  the  use  of  materials  of  special  dimensions  be  discon- 
tinued. The  purchase  of  materials  for  members  was  decided  to  be 
entirely  outside  the  province  of  the  association.  The  secretary  was 
instructed',  however,  to  get  in  close  touch  with  mills  producing  various 
kinds  of  wood  stock  purchased  by  wagon  manufacturers  in  the  rough 
and  to  investigate  and  report  what  the  standard  dimensions  for  such 
stock  should  be.  Furthermore,  the  association  recommended  stand- 
ard heights  for  wheels  and  standard  lengths  and  widths  for  tires  for 
adoption  as  soon  as  the  shop  conditions  at  individual  factories  would 

permit. 

An  advance  in  the  price  of  steel  bars  caused  a  meeting  of  a  number 
of  implement  and  vehicle  manufacturing  concerns  to  be  held  in  March, 


^4 


\ 

4 


m 


-{ 


REDUCTION  OF  COSTS. 


59 


1906.  At  this  meeting  a  committee,  composed  of  representatives  of 
some  of  the  largest  interests  in  various  branches  of  the  industry,  was 
appointed  to  confer  with  the  steel  manufacturers.  This  resulted  in 
an  agreement  by  which  the  latter  made  a  special  price  of  $1.40  per 
hundred  pounds  on  150,000  tons  of  steel  bars  to  the  manufacturers  of 
implements  and  vehicles.  Later  in  the  year  a  standing  committee  on 
materials  was  appointed  by  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers,  after  a  special  committee  had 
made  a  report  on  the  cost  of  iron  and  steel. 

In  the  meantime  the  members  of  the  farm- wagon  association  were 
confronted  with  unsatisfactory  conditions  in  securing  bent-wood 
stock  used  for  wheel  rims,  hounds,  etc.  They  felt  that  prices  had 
been  arbitrarily  advanced  to  an  unwarranted  extent.  To  reach  a 
better  understanding  with  producers,  a  conference  was  held  with  rep- 
resentatives of  the  Vehicle  Woodstock  Co.,  a  concern  which  marketed 
the  products  of  a  large  number  of  the  bending  factories.  The  re- 
sult of  the  conference  was  unsatisfactory  to  the  wagon  manufactur- 
ers, and  in  the  latter  part  of  1906  or  early  in  1907  several  members 
of  the  farm-wagon  association  formed  a  mutual  company,  known  as 
the  National  Wagon  Stock  Co.,  to  supply  their  own  bent  stock.  The 
wagon  manufacturers'  association  also  made  a  protest  to  an  associa- 
tion of  the  spoke  manufacturers  against  existing  prices  of  spokes, 
pointing  out  that  if  prices  were  advanced  the  wagon  makers  would 
be  forced  to  produce  their  own  supply  of  spokes. 

To  induce  competition  among  the  producers  of  various  kinds  of 
wagon  wood  stock,  the  members  of  the  wagon-makers'  association 
decided  to  establish  a  bureau  of  the  association  to  encourage  as  many 
mills  as  possible  to  take  up  the  cutting  of  wagon  stock.  In  the  early 
part  of  1907  several  thousand  copies  of  a  letter  were  sent  out  to  mills 
and  shippers  of  hardwoods  and  wagon-box  materials,  requesting 
each  to  return  a  sheet  listing  materials  for  sale,  including  axles, 
bolsters,  reaches,  hubs,  bottom  boards,  poles,  felloes,  bent  hounds, 
rims  and  poles,  spokes,  eveners,  singletrees,  neck  yokes,  plank,  and 
box  boards.  It  was  planned  to  send  out  a  similar  inquiry  monthly, 
the  wagon  manufacturers  being  furnished  with  a  compilation  of  the 
replies  in  order  to  aid  them  in  supplying  their  wants.  In  order  that 
the  seller  should  come  in  contact  only  with  actual  buyers,  it  was  pro- 
posed that  the  various  members  of  the  wagon  association  should 
advise  the  secretary  of  their  needs  once  a  month  or  oftener,  so  that 
he  could  direct  them  where  they  could  be  supplied. 

The  secretary,  in  explaining  the  conditions  which  had  led  to  the 
establishment  of  this  material  bureau,  asserted  that  as  a  large  de- 
mand for  wagon  stock  existed  among  the  wagon  manufacturers,  with 
the  mills,  brokers,  and  lumber  associations  against  them,  the  only 
way  to  meet  the  situation  was  by  the  same  kind  of  an  organization 


CO 


FABM-MACHINERY  TRADE  ASSOCIATIONS. 


that  bad  brought  the  wagon  manufacturers  success  in  the  selling  field. 
Accordingly,  as  a  help  in  the  work  of  the  material  bureau,  he  pro- 
posed a  conference  of  the  buyers  of  the  different  companies  belonging 
to  the  wagon  association  to  discuss  prices,  grades,  contracts,  etc.,  and, 
in  this  connection,  he  pointed  out  that  a  dollar  saved  in  buying  stock 
was  surer  profit  than  a  dollar  advance  in  the  price  of  wagons.  Each 
buyer  was  asked  to  come  to  the  proposed  meeting  with  a  sheet  show- 
ing rough  and  finished  dimensions  in  order  to  determine  what  sizes 
should  be  declared  standards,  the  adoption  of  which  would  induce 
mills  cutting  to  such  dimensions  to  accumulate  stocks  marketable  at 
any  time  from  which  the  wagon  manufacturers  could  draw  at  will. 
Furthermore,  certain  specified  dimensions  were  adopted  as  standard 
for  singletrees  and  neck  yokes,  common  parts  in  which  there  was  little 
individuality,  in  the  belief  that  if  manufacturers  of  such  parts  would 
be  induced  to  turn  them  out  in  large  quantities  the  price  to  the  wagon 
manufacturers  would  be  reduced. 

One  of  the  most  important  results  of  the  conference  of  wagon 
buyers,  held  in  September,  1907,  was  a  proposal  to  bring  about  the 
adoption  of  certain  grading  and  inspection  rules  to  govern  the  pur- 
chase of  hardwood  lumber.  As  a  result  of  this  proposal,  grading 
and  inspection  rules  for  wagon  stock  were  adopted  by  agreement  with 
the  National  Hardwood  Lumber  Association  and  other  hardwood 
lumber  associations.  In  February,  1909,  a  conference  was  held  be- 
tween committees  representing  the  wagon  manufacturers'  association 
and  the  spoke  manufacturers'  association,  at  which  certain  grading 
and  inspection  rules  for  white-oak  spokes  were  agreed  upon,  to  be 
submitted  to  the  respective  associations  for  approval. 

In  the  meantime,  to  afford  the  members  of  the  wagon  association 
a  quick  and  effective  means  of  getting  quotations  on  materials,  the 
secretary  issued  a  pamphlet  in  June,  1908,  containing  the  names  of 
producers  of  different  kinds  of  wagon-wood  stock  intended  for  the 
exclusive  use  of  the  members  of  the  wagon  association.  In  Septem- 
ber, 1908,  a  similar  list  was  issued  of  the  names  of  the  manufacturers 
of  various  iron  and  steel  parts  entering  into  the  construction  of  farm 
wagons. 

Other  methods  of  reducing  the  cost  of  wagon  materials  proposed 
in  1908  were  the  substitution  of  square  front-hounds  for  bent  front- 
hounds  on  all  drop-pole  2-horse  wagons,  as  fast  as  the  shop  conditions 
of  each  member  would  permit,  and  also  an  attempt  to  induce  the 
various  iron  and  steel  mills  to  carry  stocks  of  tires  provided  standard 
lengths  were  adopted  by  the  wagon  manufacturers'  association.  Mem- 
bers were  later  urged  to  conform  to  this  recommendation  and  also 
to  adopt  standard  heights  for  bolsters.  It  was  also  suggested  that 
if  the  wagon  makers  could  adopt  a  standard  form  of  oval  or  round- 
edge  tire  the  iron  and  steel  mills  in  making  their  rolls  could  be 


REDUCTION  OF  COSTS. 


61 


' 


^ 


..^    -m 


assured  that  one  form  would  be  satisfactory  to  all  wagon  manu- 
facturers. 

In  a  bulletin  referring  to  the  work  of  the  material  bureau  issued 
in  the  spring  of  1909  the  secretary  claimed  that  the  adoption  of 
standard  dimensions,  of  grading  and  inspection  •  rules  for  wagon 
stock,  and  of  grading  and  inspection  rules  for  oak  wagon-spokes, 
which  had  been  brought  about  by  the  bureau,  were  worth  all  that 
the  association  work  had  cost,  and  he  expressed  the  belief  that  the 
vahie  of  the  bureau  would  be  better  appreciated  when  stock  became 
more  difficult  to  secure  as  the  wagon  manufacturers  came  into  the 
market  for  materials. 

The  operations  of  the  material  bureau  do  not  appear  to  have  been 
entirely  satisfactory  to  producers,  one  of  whom  reported  that  certain 
other  producers  had  expressed  the  opinion  that  the  object  of  the 
bureau  was  to  get  material  cut  to  the  size  desired  by  the  wagon  manu- 
facturers, who  would  offer  such  prices  as  they  pleased,  knowing  that 
the  material  could  not  be  marketed  elsewhere.  The  secretary  of  the 
wagon  association  in  calling  the  attention  of  members  to  this  com- 
munication stated  that  he  had  replied  that  there  was  no  recognized 
market  regarding  price  and  that  the  operations  of  the  bureau  did  not 
hamper  the  buying  ability  of  any  of  the  members  of  the  wagon 
association.  He  pointed  out  to  the  members  of  the  association  that 
if  conferences  of  the  buyers  were  held  he  believed  that  better  condi- 
tions would  be  created  in  the  wagon-stock  market,  because,  if  the 
wagon  manufacturers  could  figure  on  such  materials  as  plow  and 
implement  makers  figured  on  iron  and  steel,  the  interests  of  the 
wagon  manufacturers  would  not  be  injured  and  trade  jeopardized 
by  the  constant  fluctuation  of  prices. 

An  improvement  in  the  trade  outlook  in  1909  caused  the  members 
of  the  wagon  association  to  approach  the  market  cautiously  to  avoid 
forcing  the  prices  of  materials  upward.  It  was  felt  that,  since 
the  action  of  traveling  buyers  sent  out  by  different  wagon  manufac- 
turers in  bidding  for  material  had  much  to  do  with  general  advances 
in  prices,  it  would  be  of  considerable  advantage  to  furnish  these  buy- 
ers with  accurate  information  as  to  prevailing  prices.  The  secretary 
had  already  been  instructed  to  formulate  a  plan  for  gathering,  tabu- 
lating, and  distributing  information  concerning  the  prices  and  market 
conditions  of  wood  materials.  He  suggested  that  a  meeting  of  the 
buyers  could  be  held  several  times  a  year  to  devise  ways  and  means 
by  which  individual  manufacturers  could  be  better  able  to  cope  with 
various  associations  and  organizations  that  were  being  formed  among 
the  producers  of  materials.  He  asserted  that  there  was  no  reason 
why,  through  the  interchange  of  information,  many  dollars  of  profit 
could  not  be  added  by  the  savings  in  more  intelligent  purchasing. 
The  matter  was  thorougly  discussed  at  the  annual  meeting  of  the 


fABM-MACHINERY  TBADE  ASBOCIATIOKa 


associatioii  in  November,  1909,  and  the  aecretary's  suggestions  were 
approved. 

The  proposed  meeting  of  the  buyers  was  held  at  Chicago  in  De- 
cember, 1909.  The  secretary  of  the  association  was  directed  to  gather 
and  tabulate  information  regarding  the  prices  paid  by  members  for 
a  few  standard  sizes  of  materials,  and  also  the  amount  of  stock  on 
hand.  A  bulletin  containing  this  information  was  issued  to  mem- 
bers in  February,  1910.  Attention  was  called  to  the  fact  that  in  the 
large  majority  of  cases  the  prices  ranged  very  close  together.  The 
secretary  expressed  the  hope  that  it  might  be  possible  to  keep  the 
prices  from  taking  a  wider  spread  by  making  a  simUar  comparison 
at  frequent  intervals.  A  short  time  before  a  bulletin  had  been  sent 
to  the  mills  and  producers  of  wagon  stock  relative  to  the  plans  of  the 
material  bureau  for  1910,  in  which  it  was  stated  that  the  competition 
among  wagon  manufacturers  for  suitable  material  was  as  free  and 
open  as  it  had  ever  been  and  was  likely  to  continue  so,  as  it  was  no 
part  of  the  object  of  the  material  bureau  to  establish  conditions  that 
would  enable  the  wagon  manufacturer  to  secure  control  over  the 
prices  of  supplies  and  materials.  He  pointed  out  that  while  the 
wagon  manufacturer  was  benefited  by  the  larger  field  in  which  to 
buy  materials  when  stock  was  cut  to  standard  dimensions,  yet  there 
had  been  no  overproduction,  and  stocks  had  been  sold  at  fair  prices, 
although  the  demand  had  been  li^t  He  also  pointed  out  that  be- 
fore the  adoption  of  standard  specifications  nearly  every  factory  had 
its  own  specifications,  which  restricted  the  market  on  stock  cut  to 
such  dimensiona 

An  effort  was  made  to  enlist  the  aid  of  several  wagon-manufactur- 
ing companies  outside  the  association  in  the  support  of  the  material 
bureau  from  whose  work  they  had  benefited.  In  presenting  the 
advantages  of  the  bureau  to  these  manufacturers,  stress  was  laid 
upon  the  advantage  that  would  result  if  a  common  or  general  market 
price  for  wagon  material  of  standard  dimensions  could  be  estab- 
lished, or  published  in  a  way  that  would  be  generally  understood. 
Attention  was  called  to  the  fact  that  manufacturers  of  furniture  and 
chairs  by  standardizing  their  requirements  had  been  able  to  establish 
a  sort  of  common  value  between  the  mill  and  the  consumer.  Several 
of  the  wagon  companies  outside  the  association  expressed  a  willing- 
ness to  contribute  to  the  maintenance  of  the  material  bureau,  but 
some  refused  to  pay  as  much  as  requested. 

In  the  meantime  the  successful  result  of  the  efforts  toward  stand- 
ardization led  to  the  suggestion  that  the  movement  be  carried  fur- 
ther. Kevised  grading  and  inspection  rules  for  wagon  box-boards 
were  also  recommended  for  adoption  to  the  National  Hardwood  Lum- 
ber Association  and  the  Hardwood  Manufacturers'  Association.  An 
agreement  in  regard  to  this  revision  was  reached  with  the  National 


X«i|. 


m 


n 


EEDUCTION   OF   COSTS. 


6a 


Hardwood  Lumber  Association  in  June,  1910.  Members  of  the 
wagon  association  were  requested  to  use  these  rules  in  purchases  sub- 
sequently made  in  order  to  make  them  effective  at  once. 

In  September,  1910,  it  was  pointed  out  that  every  important  item 
of  wood  materials  for  farm  wagons  had  been  standardized  except 
hubs  and  hounds,  and  the  fact  that  each  wagon  manufacturer  insisted 
upon  a  special  pattern  of  hub  made  it  difficult  for  the  hub  manu- 
facturer to  buy  his  raw  materials  or  accumulate  finished  stock  with- 
out first  having  orders  and  specifications  on  hand.  It  had  been 
suggested  that  if  three  different  types  of  hubs  could  be  adopted  as 
standard  a  large  variety  would  be  cut  out  and  enable  the  hub  manu- 
facturer to  turn  out  hubs  for  the  open  market,  which  it  was  thought 
was  the  only  thing  that  would  make  competition  in  that  line.  Fur- 
thermore, the  secretary  was  directed  to  notify  all  interested  in  the 
California  trade  that  bolsters  of  42  inches  should  be  considered  as 
standard  and  the  manufacture  of  bolsters  of  44  inches  should  be 
discontinued. 

At  about  this  time  the  secretary  reported  that  22  of  the  27  members 
of  the  association  had  either  abandoned  the  use  of  bent- wood  front 
hounds  as  recommended  by  the  association  (see  p.  60)  or  were  in 
process  of  doing  so.  He  expressed  the  belief  that  the  influence  of  the 
majority  would  undoubtedly  accomplish  the  completion  of  the 
change. 

In  the  latter  part  of  1910  the  secretary  of  the  wagon  association 
pointed  out  that  manufacturers  felt  that,  in  being  obliged  to  pay 
prices  which  were  the  same  as  Pittsburgh  prices,  plus  Pittsburgh 
freight  rates,  on  steel  bars  shipped  from  points  hundred  of  miles 
nearer  the  purchaser,  they  were  paying  an  arbitrary  tax  in  addition 
to  prices  which  already  included  at  least  a  fair  manufacturing  profit. 
He  suggested  that  if  all  the  consumers  were  of  like  mind  there  were 
several  ways  in  which  a  readjustment  of  basing  points  could  be  ef- 
fected. The  matter  was  discussed  by  the  members  of  the  National 
Wagon  Manufacturers'  Association  and  by  the  executive  committee 
of  the  National  Association  of  Agricultural  Implement  &  Vehicle 
Manufacturers,  but  the  records  do  not  show  that  any  definite  action 
was  taken  beyond  the  adoption  of  resolutions  recommending  that 
individual  members  use  their  influence  to  eliminate  the  additional 
freight  charge,  and  that  the  materials  committee  of  the  National 
Association  of  Agricultural  Implement  &  Vehicle  Manufacturers 
urge  the  steel  manufacturers  to  base  steel  prices  upon  Chicago,  Gary, 
and  other  points,  as  well  as  Pittsburgh. 

National  Plow  Assoclation. — During  the  four  years  of  its  exist- 
ence, from  April,  1907,  to  December,  1910,  the  National  Plow  Associa- 
tion did  not  attempt  to  maintain  a  material  bureau  like  that  of  the 
wagon  manufacturers'  association.    No  attempt   appears  to  have 


4 


FABM'MACHINEBT  TRADE  ASSOCIATIONS 


been  made  to  bring  the  plow  manufacturers  and  the  producers  of 
materials  used  by  them  into  communication,  but  some  efforts  were 
made  to  encourage  the  former  to  adopt  standard  specifications  for 
certain  common  parts.  (See  Exhibit  18,  p.  282.)  Soon  after  the 
plow  association  was  organized  an  investigation  by  the  secretary  had 
disclosed  the  fact  that  the  mills  were  rolling  about  40  different  sections 
of  plow  beams,  and  from  100  to  125  different  sizes.  It  was  pointed 
out  that  if  the  number  of  sections  could  be  reduced  to  four  or  five, 
and  if  several  of  the  principal  steel  mills  could  be  induced  to  equip 
themselves  to  turn  out  these  standard  sections,  it  would  place  the 
plow  makers  in  much  better  position  than  to  be  tied  up  with  one  or 
two  mills  who  had  rolls  for  special  sections. 

Another  inquiry  showed  that  33  different  patterns  of  neck  yokes 
were  in  use  among  the  members,  many  of  whom  purchased  finished 
neck  yokes.  The  secretary  suggested  that  if  this  number  could  be 
reduced  the  mills  could  carry  a  stock  of  rough  and  finished  patterns, 
probably  resulting  in  lower  costs  and  selling  prices.  Early  in  1909 
a  standard  neck  yoke  was  adopted  for  sulky  and  gang  plows,  and  also 
for  walking,  riding,  and  disk  cultivators  and  listing  plows.  It  was 
agreed  that  all  members  should  adopt  the  patterns  recommended  as 
early  as  possible. 

Instructions  were  also  given  to  the  secretary  to  take  up  the  ques- 
tion of  standardizing  certain  other  common  parts,  such  as  poles, 
singletrees,  steel  seats,  harrow  tee&,  etc.  The  work  of  standard- 
ization did  not  progress  as  rapidly  as  expected.  In  urging  members 
to  cooperate  in  the  movement  the  secretary  declared  that,  even  if  the 
saving  in  a  single  piece  was  small,  the  saving  to  one  member  on  a 
year's  consumption  of  harrow  teeth  alone  would  more  than  pay  his 
dues  in  the  association. 

In  the  latter  part  of  1910  the  secretary  issued  a  bulletin  to  mem- 
bers, asking  their  views  on  the  subject  of  grading  and  inspection 
rules  for  yellow-pine  pole  stock.  The  replies  showed  that,  while 
all  members  required  the  same  quality  of  material,  no  two  specifica- 
tions were  alike.  It  was  the  consensus  of  opinion  among  the  mem- 
bers that  uniform  grading  and  inspection  rules  were  much  needed 
and  would  benefit  both  the  producers  and  consumers,  and,  after 
discussing  the  matter,  it  was  finally  concluded  to  refer  the  matter 
to  the  National  Association  of  Agricultural  Implement  &  Vehicle 
Manufacturers,  as  much  of  this  class  of  material  was  used  by  a 
large  class  of  manufacturers  not  members  of  the  plow  association, 
who  were  members  of  the  National  Association  of  Agricultural  Im-. 
plement  &  Vehicle  Manufacturers.  Nothing  further  seems  to  have 
been  done  along  this  line  until  the  matter  was  taken  up  by  the  plow 
and  tillage-implement  department  of  the  National  Implement  S^ 
Vehicle  Association  in  May,  1912.    (See  p.  66*) 


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P 


BBDTJOTION  OF  COSTS. 


65 


National  Implement  &  Vehicle  Association. — The  material 
bureau,  which  had  been  established  by  the  National  Wagon  Manu- 
facturers' Association,  was  continued  along  similar  lines  by  the 
National  Implement  &  Vehicle  Association.  It  was  decided,  how- 
ever, to  confine  its  activities  for  a  time  to  gathering  information 
relative  only  to  wood  materials,  including  hard  and  softwood  lum- 
ber and  dimension  stock.  It  was  thought  that  if  the  work  of  the 
bureau  proved  satisfactory  in  regard  to  wood  materials  its  activities 
could  be  extended  to  other  lines  if  desired.  The  matter  of  price 
was  left  to  the  mill  and  customer.  As  a  part  of  the  work  of  the 
bureau  it  was  also  decided  to  continue  efforts  of  the  wagon  and  plow 
association  to  aid  members  in  disposing  of  surplus  materials  or 
machinery  that  had  accumulated  from  various  causes.  From  time 
to  time  members  are  requested  to  list  such  material  as  they  may  have 
for  sale  or  which  they  may  desire.  A  compilation  is  made  from 
these  lists  and  sent  to  all  members. 

The  executive  committee  of  the  National  Implement  &  Vehicle 
Association  abolished  the  standing  committee  on  materials,  but  the 
discussion  of  matters  pertaining  to  the  cost  of  materials  continued 
to  engage  the  attention  of  the  members  of  the  special  trade  depart- 
ments of  the  association. 

At  a  meeting  of  the  farm- wagon  department  in  April,  1911,  ma- 
terials was  one  of  the  subjects  discussed.  One  member  called  atten- 
tion to  the  fact  that  the  existing  price  for  bois  d'arc^  felloes  was 
resulting  in  a  loss  to  every  manufacturer,  and  that  it  was  apparent 
from  investigations  made  that  the  supply  of  this  material  was  ap- 
proaching exhaustion.  At  this  meeting  attention  was  called  to  the 
closing  of  the  business  of  the  National  Wagon  Stock  Co..  of  Little 
Hock,  Ark.  (see  p.  59),  whose  plant  had,  it  was  claimed,  been  the 
means  of  protecting  the  wagon  manufacturers  of  the  United  States 
against  exorbitant  and  organized  advances  in  the  prices  of  bent  rims 
and  other  wagon  material  for  the  four  preceding  years,  and  it  was 
stated  that  a  proposition  was  being  considered  whereby  a  company 
at  Little  Rock  was  to  take  over  the  machinery  and  equipment  of  the 
National  Wagon  Stock  Co.  and  continue  the  manufacture  of  bent 
rims  provided  they  could  be  assured  of  the  patronage  of  the  wagon 
manufacturers.  A  resolution  was  adopted  pledging  the  support  of 
the  wagon  manufacturers  present  at  the  meeting,  the  prices  to  be 
adjusted  by  a  committee  of  the  wagon  makers.    In  November,  1912, 

*  Under  ^ate  of  Aug.  16,  1911,  the  secretary  of  the  National  Implement  &  Vehicle  Asso- 
ciation issued  a  bulletin  stating  that  a  report  of  the  Forest  Service  of  the  United  States 
Department  of  Agriculture  on  the  subject  of  bois  d'arc  or  osage  orange  had  been  pub- 
lished under  the  direction  and  at  the  expense  of  the  farm- wagon  department  of  the  Na- 
tional Implement  &  Vehicle  Association,  and  that  a  copy  would  be  mailed  to  each  member 
within  a  few  days. 


68248"— 15- 


66 


YABM-MACHIKEBY  TBABB  ASSOOUHOKS. 


however,  it  was  decided  to  sell  the  property  of  the  National  Wagon 
Stock  Co. 

A  meeting  of  the  buyers  of  four  of  the  principal  companies*  manu- 
facturing farm  wagons  was  held  in  November,  1913,  to  consider  the 
possibility  of  improvement  in  methods  of  buying.  The  record  of 
this  meeting  states  that  no  definite  action  was  taken,  but  it  was 
decided  that  each  of  those  present  should  study  ways  and  means  and 
report  suggestions  at  the  next  conference  that  should  be  held. 

At  a  meeting  of  the  plow  department  of  the  National  Implement 
&  Vehicle  Association  in  May,  1911,  the  secretary  was  instructed 
to  take  up  the  matter  of  standardization  of  plow-beam  billets  with 
several  steel  companies  and  report.  In  May,  1912,  the  members  of 
the  plow  department,  in  considering  a  suggestion  of  the  Yellow  Pine 
Manufacturers'  Association  that  the  adoption  of  grading  and  in- 
spection rules  for  yellow-pine  pole  stock  might  be  of  mutual  interest, 
directed  the  secretary  to  ascertain  the  views  of  the  members  of  the 
plow  department  upon  this  matter.  The  results  of  the  secretary's 
investigations  are  not  shown  in  the  records  of  the  association. 

In  the  early  part  of  1913  the  plow  department  held  a  meeting  at 
which  special  consideration  was  given  to  the  material  situation  with 
reference  to  its  probable  effect  on  selling  prices.  It  was  thought  that 
contracts  for  materials  should  cover  a  period  of  12  months  ending 
July  1  each  year.  At  a  meeting  in  May  it  was  shown  that  the  market 
price  of  steel  remained  unchanged  and  that  the  producers  were  ap- 
parently determined  to  maintain  prices  regardless  of  the  circum- 
stances surrounding  the  plow  and  tillage-implement  business,  which 
the  plow  manufacturers  believed  deserved  consideration  in  order 
that  their  volume  of  business  and  that  of  the  producers  should  not 
be  affected  adversely.  It  developed  that  comparatively  few  of  the 
manufacturers  had  bought  and  that  a  number  of  the  largest  of  them 
were  not  inclined  to  buy  under  existing  conditions.  This  situation 
was  evidently  a  reason  for  a  suggestion  of  the  secretary  of  the  asso- 
ciation to  the  executive  committee  of  the  association,  which  was  as 
follows : 

We  believe  also  that  this  association  represents  such  a  large 
consumption  of  common  materials,  i.  e.,  iron  and  steel,  that  by 
properly  directed  cooperation  much  benefit  might  be  obtained  in 
correcting  some  of  the  conditions  under  which  we  contract  and 
are  supplied. 

The  desirability  of  creating  a  standing  committee  or  department 
of  purchasing  agents  of  concerns  belonging  to  the  National  Imple- 
ment &  Vehicle  Association  was  brought  up  in  November,  1913,  but 
it  was  thought  that  the  matter  should  be  referred  to  the  executive 

*  These  companies  were  the  John  Deere  Wagon  Co.,  the  International  Harvester  Co.,  tlw 
Studebaker  Corporation,  and  tbe  Mandt  Wagon  Co.  (Moline  Plow  Co.) 


«^ 


EEDUCTION  OF  COSTS. 


67 


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•* 


41 


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0 


committee  of  the  association  for  consideration.  No  record  is  avail- 
able to  show  that  any  steps  have  been  taken  to  establish  such  a 
department. 

Section  3.  Charges  for  transportation. 

The  manufacturers'  associations  have  been  active  in  promoting 
the  interests  of  their  members  in  respect  to  freight  rates  and  rules 
governing  the  transportation  of  goods.  In  these  matters  they  have 
often  received  considerable  assistance  from  the  dealers'  associations. 
When  the  National  Association  of  Agricultural  Implement  &  Ve- 
hicle Manufacturers  was  organized,  in  1894,  it  was  proposed  that  the 
executive  committee  should  look  after  the  matter  of  railroad  freights 
and  transportation  charges.  A  committee  on  freight  and  classi- 
fication, to  work  in  the  interest  of  members  in  respect  to  anything 
affecting  the  cost  of  freight  transportation,  was  one  of  the  first  stand- 
ing committees  to  be  created.  It  was  recognized  that  the  combined 
influence  of  the  members  would  accomplish  much  more  effect  in  nego- 
tiating with  the  railroads  than  could  be  accomplished  by  the  indi- 
vidual manufacturers. 

One  of  the  first  matters  taken  up  was  to  petition  Congress  for  the 
passage  of  a  law  requiring  railroads  to  adopt  a  uniform  freight 
classification  throughout  the  United  States.  Negotiations  with  the 
Western  Classification  Committee  in  the  latter  part  of  1894  resulted 
in  an  agreement  that  the  latter  would  not  make  certain  proposed  ad- 
vances. In  November,  1896,  however,  the  freight  committee  reported 
that  an  unsuccessful  effort  had  been  made  to  get  the  Western  Classi- 
fication Committee  to  make  reductions  in  certain  articles  that  had 
recently  been  advanced  by  changes  in  classification.  The  committee 
pointed  out  that  there  was  still  recourse  to  specific  or  commodity 
rates. 

From  this  time  on,  similar  efforts  continued  to  be  made  by  the 
National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 
facturers and  the  National  Wagon  Manufacturers'  Association  to 
induce  the  various  railroad  classification  committees  to  take  action 
favorable  to  the  implement  and  vehicle  manufacturers,  or  to  refrain 
from  putting  into  effect  rates  or  rules  that  threatened  to  affect  the 
manufacturers  adversely,  such  as  changes  in  rates,  classifications, 
and  rules  governing  minimum  carload  weights,  car  demurrage,  rates 
on  mixed  shipments  in  carload  lots  and  on  damaged  goods  returned 
for  repairs.  Efforts  were  made  for  the  freight  committees  of  the 
two  associations  to  cooperate  more  closely  with  each  other,  especially 
after  1901,  when  the  members  of  the  National  Association  of  Agri- 
cultural Implement  &  Vehicle  Manufacturers  decided  to  employ  a 
permanent  secretary  experienced  in  traffic  matters. 


fi 


0 


68 


FARM-MACHINEBY  TRADE  ASSOCIATIONS. 


After  the  National  Plow  Association  was  organized,  in  1907,  a 
freight  transportation  committee  was  created,  but  this  committee 
does  not  appear  to  have  been  especially  active,  due  probably  to  the 
fact  that  many  of  the  members  of  the  plow  association  also  belonged 
to  the  National  Association  of  Agricultural  Implement  &  Vehicle 
Manufacturers. 

In  July,  1908,  the  chairman  of  the  committee  on  freight  and  trans- 
portation of  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers  was  instructed  to  file  complaint  with  the  In- 
terstate Commerce  Commission,  protesting  against  proposed  general 
advances  in  rates.  He  was  authorized  to  join  or  cooperate  with  any 
organization  represented  for  that  purpose.  The  records  of  the  asso- 
ciation do  not  show  that  any  action  was  taken  along  this  line  until 
May,  1910,  when  a  conference  of  shippers  of  different  commodities, 
at  which  the  National  Association  of  Agricultural  Implement  &  Ve- 
hicle Manufacturers  was  represented,  was  held  at  Chicago,  and  a  com- 
mittee appointed  to  address  a  letter  to  each  of  the  presidents  of  east- 
ern railroad  lines  suggesting  that  the  matter  of  an  advance  in  rates 
be  referred  to  the  Interstate  Commerce  Commission.  A  meeting  of 
the  various  shipping  interests  to  be  held  at  Omaha  was  called  to 
consider  proposed  advances  in  rates  in  western  trunk-line  territory. 

Subsequently  a  truce  was  arranged  whereby  the  railroads  agreed  to 
withdraw  temporarily  the  proposed  increases  pending  adjudication  jy 
the  Interstate  Commerce  Commission.  The  shippers'  committee  rep- 
resenting various  commercial  interests,  appointed  a  special  committee 
of  12  members,  including  the  secretary  of  the  National  Association 
of  Agricultural  Implepaent  &  Vehicle  Manufacturers  and  the  freight 
traffic  manager  of  the  International  Harvester  Co.,  to  go  to  Washing- 
ton to  represent  the  interests  of  the  shippers.  Hearings  were  held 
by  the  Interstate  Commerce  Commission.  Prior  to  one  of  these  hear- 
ings held  at  Chicago,  the  members  of  the  subcommittee  of  the  ship- 
pers' committee  had  preliminary  meetings  and  invited  the  coopera- 
tion and  interest  of  every  shipper.  The  National  Association  of 
Agricultural  Implement  &  Vehicle  Manufacturers  was  active  in  its 
support  of  this  committee,  furnishing  money  and  the  assistance  of  its 
officers.  Finally,  in  February,  1911,  members  of  the  National  Im- 
plement &  Vehicle  Association  were  notified  by  the  secretary  that  the 
Interstate  Commerce  Commission  had  decided  these  cases,  known  as 
the  Eastern  and  Western  freight  cases,  against  the  carriers.  It  was 
pointed  out  that  during  the  fight  the  association  had  applied  its  ener- 
gies to  problems  confronting  the  implement  and  vehicle  lines,  although 
irooperating  with  shippers  of  other  commodities  in  the  main  issue. 

In  the  meantime  members  of  the  National  Association  of  Agricul- 
tural Implement  &  Vehicle  Manufacturers  were  notified  that  the  secre- 
tary would  assist  them  in  procuring  refunds  of  high  charges  that  had 


^-J 


4 


i3^ 


H 

A 


BEDUCTION  OF  COSTS. 


69 


been  made.  The  matter  of  establishing  a  bureau  in  the  secretary's 
office  to  handle  freight  claims  for  members  was  considered,  and  the 
latter  was  instructed  to  write  all  members  having  no  regularly  or- 
ganized traffic  department  to  ascertain  whether  he  could  render  as- 
sistance in  respect  to  claims  arising  in  transportation  matters.  There 
was  also  considerable  cooperation  in  respect  to  freight  matters  be- 
tween the  National  Federation  of  Eetail  Implement  &  Vehicle  Deal- 
ers' Associations  and  the  National  Association  of  Agricultural  Im- 
plement &  Vehicle  Manufacturers.  In  1909  it  was  reported  that  these 
two  organizations  were  working  together  for  an  improved  bill  of 
lading. 

When  the  National  Implement  &  Vehicle  Association  was  organ- 
ized, in  1911,  the  former  secretary  of  the  National  Association  of 
Agricultural  Implement  &  Vehicle  Manufacturers  was  employed  as 
freight  traffic  manager  to  devote  his  entire  time  to  the  traffic  work 
of  the  association,  continuing  the  activities  of  the  National  Associa- 
tion of  Agricultural  Implement  &  Vehicle  Manufacturers  in  this 
respect.  It  had  become  customary  for  the  earlier  association  to  issue 
bulletins  and  circular  letters  from  time  to  time,  advising  members 
not  only  of  proposed  traffic  changes  but  also  of  other  matters  affect- 
ing the  cost  of  transportation.  This  practice  was  continued  by  the 
National  Implement  &  Vehicle  Association.  One  of  the  first  bulle- 
tins issued  by  the  freight  traffic  manager  of  this  association  related  to 
a  proposed  change  in  the  rules  of  the  western  trunk  lines  governing 
the  storage  of  implements  in  transit.  Soon  afterwards  members  of 
the  association  were  requested  to  express  their  views  on  a  bill  to 
regulate  express  companies,  which  had  been  introduced  in  the  Illi- 
nois Legislature.  These  are  merely  illustrative  of  various  topics 
mentioned  in  the  bulletins  and  circular  letters  of  this  department  of 
the  association. 

At  the  annual  convention  held  at  Chicago  in  October,  1911,  a  com- 
prehensive report  by  the  freight  traffic  manager,  who  was  also  chair- 
man of  the  freight  transportation  committee  of  the  association, 
called  attention  to  various  phases  of  the  transportation  problem  and 
the  manner  in  which  the  work  of  the  department  was  conducted  in 
looking  after  the  interests  of  members.  It  called  special  attention 
to  the  facilities  enjoyed  by  the  association  for  securing  information 
regarding  important  traffic  changes  and  to  the  importance  of  audit- 
ing freight  bills,  and  in  this  connection  stated  that  during  the  period 
from  January  1,  1911,  to  October  11,  1911,  the  department  had  ad- 
justed overcharge  and  loss  and  damage  claims  for  members  aggre- 
grating  about  $9,700. 

Later  the  secretary  of  the  association  was  instructed  to  urge  the 
freight  traffic  department  to  endeavor  to  interest  each  member  in  some 


i» 


TO 


FABM-MACHINEBY  TRADE  ASSOCIATIONa 


phase  of  the  work  of  that  department,  and  it  was  reported  that  at  that 
time  about  60  per  cent  of  the  members  were  actively  cooperating. 

The  annual  report  of  the  freight  traffic  department,  at  the  con- 
vention held  in  October,  1912,  called  attention  to  changes  in  the 
various  railroad  classifications  during  the  preceding  year.  An 
interesting  feature  of  the  department's  work  was  shown  in  its  report 
of  negotiations  with  the  Southern  Classification  Committee.  The 
report  stated  that  the  latter  committee  issued  a  revised  classification 
embodying  a  large  number  of  drastic  changes  to  become  effective 
June  17,  1912.  After  analysis  by  the  freight  traffic  department  of 
the  National  Implement  &  Vehicle  Association,  the  committee  was 
notified  that  the  proposed  changes  were  not  acceptable  to  the  mem- 
bers of  the  association,  and  it  was  the  intention  of  the  association  to 
ask  the  Interstate  Commerce  Commission  for  a  suspension  of  the 
changes  pending  an  inquiry  as  to  their  reasonableness.  The  commit- 
tee immediately  notified  the  association  that  it  did  not  desire  a  con- 
test over  the  matter  and  that  they  would  gladly  meet  representatives 
of  the  association  in  conference  to  discuss  the  various  objectionable 
items.  Several  conferences  were  held,  and  as  a  result  the  committee 
promised  to  withdraw  the  objectionable  changes. 

The  report  also  stated  that  the  work  of  the  department  had  greatly 
increased  and  that  members  were  depending  upon  it  more  and  more  for 
assistance  in  handling  their  minor  difficulties  and  still  more  largely  in 
resisting  arbitrary  action  on  the  part  of  the  carriers  in  large  issues, 
such  as  classifications  and  tariffs,  where  indi\4dual  resistance  or 
effort  would  avail  but  little.  The  report  gave  members  certain 
specific  advice  to  assist  them  in  their  transactions  with  carriers. 

As  to  the  value  of  a  cooperative  association  in  freight  matters,  the 
report  said: 

The  appeals  taken  to  the  Interstate  Commerce  Commission, 
the  many  times  we  have  appeared  before  State  and  interstate 
railroad  bodies  and  our  constant  conferences  with  them  is  suf- 
icient  evidence  of  what  it  is  possible  to  do  for  a  cooperative 
organization  along  these  lines.  The  value  of  our  representing  a 
large  number  of  shippers  of  any  one  commodity  can  not  be  over- 
estimated, for  today  the  Interstate  Commerce  Commission,  State 
commissions  and  the  railroads  themselves  are  regarding  the 
wishes  and  claims  of  the  majority  of  shippers  rather  than  indi- 
viduals or  shippers  having  a  large  volume  of  business.  In  fact, 
there  is  a  strong  leaning,  and  very  properly  too,  in  endeavoring 
to  determine  what  will  be  the  greatest  good  to  the  greatest  num- 
ber; therefore,  I  say  that  this  work  of  our  association  needs  no 
further  justification  than  showing  that  it  has  now  and  will  con- 
tinue to  have  an  increasing  beneficial  effect  in  bringing  about  a 
greater  measure  of  square  deal  between  carrier  and  shipper  as 
time  goes  on. 


n' 


¥ 


BBDUCTION  OF  COSTS. 


71 


At  the  close  of  the  convention  the  association  adopted  the  following 
resolution : 

Whereas,  there  are  no  problems  confronting  the  manufacturer 
of  greater  importance  today  than  those  of  freight  transportation, 

Be  it  resolved,  That  special  attention  be  given  all  of  the  recom- 
mendations submitted  in  the  report  of  the  freight  transportation 
committee. 

Another  resolution  adopted  read  as  follows: 

Whereas,  sufficient  and  efficient  transportation  is  necessary  to 
the  prosperity  of  the  whole  country. 

Therefore,  he  it  resolved,  That  we  favor  such  laws  and  regula- 
tions as  will  give  transportation  companies  sufficient  earnings  to 
meet  all  necessary  cost  of  maintenance  and  operation  and  to 
provide  all  facilities  required  by  the  growth  of  communities,  and. 

Be  it  further  resolved,  That  we  favor  cooperation  between  the 
transportation  companies,  producers  and  snippers'  associations 
to  promote  such  results. 

At  the  annual  convention  of  the  association  in  October,  1913,  the 
freight  traffic  manager  of  the  National  Implement  &  Vehicle  Asso- 
ciation reported  that  during  the  11  months  preceding  his  depart- 
ment had  received  over  23,000  freight  bills  for  auditing,  of  which 
between  10,000  and  11,000  were  for  $8  (the  minimum  amount  checked 
by  the  department)  or  more.  Overcharges,  amounting  to  $1,578.07, 
were  discovered.  Claims  to  the  amount  of  nearly  $12,000  had  been 
adjusted  during  the  year  ended  October  1, 1913.  He  also  stated  that 
during  the  preceding  11  months  41  bulletins,  giving  information 
relative  to  all  important  changes  in  traffic  matters  affecting  members, 
had  been  issued.  He  called  attention  to  the  rulings  of  the  Interstate 
Commerce  Commission  on  changes  that  had  been  proposed  in  the 
Western  Classification,  and  also  to  other  matters  of  freight  classifi- 
cation in  which  the  members  of  the  association  were  interested.  He 
asserted  that  the  association  in  cooperation  with  others  had  been 
able  to  prevent  the  cancellation  of  half  rates  applying  on  returned 
shipments  in  Minnesota,  North  and  South  Dakota,  Illinois,  Iowa, 
Kansas,  Nebraska,  and  two  or  three  other  States.  In  addition,  he 
advocated  that  hearings  before  classification  committees  should  be 
held  at  points  accessible  to  shippers  and,  furthermore,  that  the  mak- 
ing of  rates  should  not  be  done  behind  closed  doors,  or  at  the  dicta- 
tion or  suggestion  of  any  faction  or  set  of  shippers.  The  report  also 
specified  various  matters  regarding  shipments,  etc.,  to  which  members 
were  advised  to  give  their  attention.  The  report  concluded  by  urging 
the  support  and  cooperation  of  members  in  the  work  of  the  freight 
traffic  department,  and  stated  that  the  aim  of  that  department  was  to 
assist  the  traffic  manager  of  each  member. 

In  October,  1911,  the  traffic  manager  of  the  National  Implement  & 
Vehicle  Association  explained  to  delegates  to  the  dealers'  Federation 


•♦  y  "^ 


4 


72 


FABM-MACHINERY   TRADE  ASSOCIATIONa 


BEDUCTION  OF  COSTS. 


73 


that  the  Western  Classification  Committee  had  voted  to  eliminate 
binder  twine  from  carload  shipments  of  implements  and  to  raise  the 
minimum  carload  weight  to  between  24,000  and  30,000  pounds,  de- 
pending upon  the  length  of  the  car.  The  Federation  adopted  a  reso- 
lution condemning  the  proposed  changes  as  an  unjustifiable  attempt 
on  the  part  of  the  railroads  to  increase  their  revenue,  also  asserting 
that  such  a  change  would  be  disastrous  to  small  dealers,  compelling 
them  to  overload  or  pay  local  freight  on  practically  all  their  goods, 
resulting  in  increased  cost  to  the  farmer. 

In  January,  1912,  the  freight  traffic  manager  advised  members  of 
the  National  Implement  &  Vehicle  Association  in  regard  to  the 
changes  proposed  by  the  Western  Classification  Committee.  Among 
the  changes  specified  was  that  taking  binder  twine  out  of  the  agricul- 
tural-implement classification  and  placing  it  under  the  head  of  cord- 
age. Accordingly,  the  association  filed  a  petition  with  the  Interstate 
Commerce  Commission,  asking  for  the  suspension  of  items  objection- 
able to  members  of  the  association.  A  hearing  was  held  before  the 
suspension  board  of  the  Interstate  Commerce  Commission,  at  which 
the  National  Implement  &  Vehicle  Association  was  represented  by 
about  50  persons,  including  members  of  its  freight  transportation 
committee,  its  attorneys,  representatives  of  companies  belonging  to 
the  association,  representatives  of  the  dealers'  National  Federation 
and  constituent  organizations,  and  witnesses  drawn  from  outside. 
In  a  bulletin  to  members  the  secretary  stated  that  the  outcome  of 
the  matter  was  most  important,  for,  if  made  effective,  the  increased 
freights,  expenses,  and  inconveniences  would  amoimt  to  many  hun- 
dreds of  thousands  of  dollars,  and  there  was  hardly  a  member  of 
the  National  Implement  &  Vehicle  Association  that  would  not  be 
affected  if  the  privilege  of  mixing  implements  should  be  disturbed. 

The  Interstate  Commerce  Commission  extended  the  date  on  which 
the  new  classification  should  become  effective,  and,  in  April,  1912,  the 
secretary,  attorney,  and  traffic  manager  of  the  National  Implement  & 
Vehicle  Association,  and  the  secretary  of  the  dealers'  National  Fed- 
eration attended  a  hearing  on  the  new  classification  held  by  the 
Interstate  Commerce  Commission  in  Washington.  Early  in  Janu- 
ary, 1913,  announcement  was  made  that  the  Interstate  Commerce 
Commission  had  rendered  its  decision  in  the  case,  supporting  many 
of  the  claims  of  the  association  and  holding  that  the  railroads  must" 
grant  the  mixing  privilege,  but  consenting  to  the  placing  of  binder 
twine  in  the  cordage  classification.  The  secretary  of  the  National 
Implement  &  Vehicle  Association,  in  commenting  upon  this  decision 
in  a  general  letter  to  members,  characterized  it  as  a  victory  for  that 
association.    In  this  letter  he  said,  in  part : 

In  fact,  while  this  controversy  was  pending,  both  the  Official 
and   Southern   Classification   Committees   realizing   that   such 


r 


r 


^ 


r 


-^ 
* 


■^ 


%     f-HL 


changes  could  not  be  made  arbitrarily,  have  used  more  pacific 
means,  and  by  consultation  with  manufacturers  and  organiza- 
tions representing  certain  lines,  differences  have  been  equalized 
rendering  the  suspension  of  either  the  Official  or  Southern  Clas- 
sifications unnecessary,  and  has  led  the  Commission  to  suggest 
that  hereafter  in  proposing  classification  changes  the  shippers 
be  given  timely  notice  and  afforded  an  opportunity  to  attend  a 
fair  and  impartial  hearing  in  order  that  these  adjustments  may 
be  amicably  made,  if  possible. 

This  contest  with  the  carriers  over  Western  Classification  #51 
has  cost  money  and  time,  requiring  no  less  than  five  hearings,  but 
by  the  presentation  of  a  united  front  and  the  constant  coopera- 
tion of  our  members  the  effort  represents,  we  believe,  the  best 
organized  resistance  the  carriers  have  met  with,  and  has  thor- 
oughly convinced  them  and  impressed  the  Commission  that  not 
only  was  there  merit  in  our  contentions,  but  that  we  were  deter- 
mined justice  should  be  done.  It  is  improbable  that  we  shall 
again  have  to  go  into  a  similar  contest;  in  fact,  we  are  constantly 
securing  adjustments  and  changes  through  conferences  with  the 
carriers  that  heretofore  would  have  been  difficult,  if  not  im- 
possible. 

The  Bulletin  of  the  dealers'  Federation,  in  commenting  on  this  joint 
victory  of  the  manufacturers  and  dealers,  quoted  a  transportation 
man  who  had  attended  all  the  hearings,  as  follows : 

You  implement  men  got  about  everything  you  were  after,  but 
some  others  did  not  fare  so  well.  Your  being  so  well  organized 
accounts  for  it. 

A  general  advance  of  5  per  cent  in  rates  proposed  by  the  eastern 
railroads  was  called  to  the  attention  of  the  members  of  the  National 
Implement  &  Vehicle  Association  in  a  bulletin  issued  in  October, 
1913,  and  members  were  asked  to  express  their  opinion  as  to  whether 
or  not  the  association  should  oppose  the  advance  proposed.  Shortly 
afterwards  members  of  the  association  were  notified  that  it  was  felt 
that  the  association  should  protest  this  advance  in  rates  until  it  was 
demonstrated  as  necessary  and  just,  not  overlooking  the  fact  that 
the  markets  of  the  members  of  the  National  Implement  &  Vehicle 
Association  were  now  open  to  the  world  and  that  manufacturers  in 
Canada  would  invade  the  trade  as  rapidly  as  possible,  their  progress 
being  determined  to  a  large  extent  by  the  freight  rates.  No  record  is 
available  to  show  what  further  steps  were  taken  in  this  matter  by  the 
National  Implement  &  Vehicle  Association.^ 

» The  dealers'  associations  have  also  devoted  considerable  attention  to -the  matter  of 
freight  transportation  charges.  Some  of  these  activities  have  been  undertalcen  in  co- 
operation with  the  manufacturers'  associations,  as  already  shown.  One  of  the  most 
important  phases  of  this  work  that  dealers  have  attempted  has  been  the  installation  of 
facilities  by  which  the  freight  bills  of  its  members  might  be  audited  and  overcharges 
refunded  to  their  members.  In  March,  1910,  the  secretary  of  the  National  Federation 
pointed  out  that  dealers  were  losing  i  good  deal  of  money  each  year  from  this  cause.  He 
suggested  that  a  freight  auditing  bureau  might  be  established.  No  active  steps  to  install 
such  a  bureau  appear  to  have  been  taken  until  March,  1912,  when  it  was  announced  that 
the  Western  association  had  engaged  an  auditor  and  that  the  work  of  auditing  freight 


u 


FARM-MACHIKEBY  TRADE  ASSOOIATIONS. 


Seetion  4.  Fire  insunuice. 

At  a  meeting  of  the  National  Wagon  Manufacturers'  Association 
in  1880  the  question  of  the  feasibility  of  a  mutual  insurance  com- 
pany was  discussed  but  apparently  without  result.  The  subject  does 
not  appear  to  have  been  brought  up  again  imtil  1906,  when  the  secre- 
tary of  the  wagon  association  issued  a  bulletin  calling  attention  to 
the  organization  of  the  Implement  &  Vehicle  Manufacturers'  Fire 
Insurance  Co.  under  the  guidance  of  a  special  committee  of  the  Na- 
tional Association  of  Agricultural  Implement  &  Vehicle  Manufac- 
turers. At  the  annual  meeting  of  the  latter  association  in  Septem- 
ber, 1905,  the  executive  committee  had  been  empowered  to  organize 
a  mutual  fire  insurance  association  on  lines  approved  by  the  com- 
mittee, and  soon  after  the  convention  of  the  National  Association  of 
Agricultural  Implement  &  Vehicle  Manufacturers  in  1906  the  in- 
corporators of  the  Implement  &  Vehicle  Manufacturers'  Mutual 
Insurance  Co.  met  at  Indianapolis  and  completed  the  organization 
of  the  company  as  an  enterprise  distinct  from  the  association  largely 
to  avoid  the  necessity  of  accepting  undesirable  risks  from  members 
who  otherwise  might  feel  entitled  to  special  consideration  on  account 
of  their  membership  in  the  association.  The  new  company  became 
affiliated  with  the  National  Association  of  Factory  Mutual  Insurance 
Companies.  Later,  at  a  meeting  of  the  executive  committee  of  the 
National  Association  of  Agricultural  Implement  &  Vehicle  Manufac- 
turers, in  November,  1908,  a  recommendation  of  the  association  that 
a  committee  confer  with  the  National  Fire  Protective  Association  to 
evolve  and  standardize  all  implement  factories  was  referred  to  the 
committee  on  insurance.  The  records  do  not  show  whether  the  pro- 
posed conference  was  held,  but,  in  February,  1909,  the  secretary  of 
the  association  in  following  instructions  of  the  insurance  committee 
requested  members  to  furnish  certain  statistics  which,  when  tabu- 
lated, might  be  used  to  secure  a  reduction  in  the  insurance  rates. 

Early  in  1911  the  Implement  &  Vehicle  Manufacturers'  Mutual 
Fire  Insurance  Co.  of  Indianapolis  reinsured  its  risks  and  went  out 
of  business.  At  the  annual  convention  of  the  National  Implement  & 
Vehicle  Association  in  October  of  that  year  the  committee  on  fire 
insurance  pointed  out  that  the  real  basic  principle  for  discussion  of 
fire  insurance  was  fire  prevention,  and  members  were  advised  to 
"fight  the  risk  and  not  the  rate."     Soon  afterwards  the  secretary 

bills  was  JQst  getting  under  wmy.  Other  State  associations  were  quick  to  take  similar 
action,  and  at  the  annual  meeting  of  the  National  Federation  in  October,  1913.  it  was 
reported  that  f relight  auditing  bureaus  had  been  established  for  11  of  the  constituent 
assoelations,  and  that  their  aggregate  cash  collections  to  that  time  had  amounted  to  over 
110,000.  It  was  stated  that  this  tangible  benefit  had  enabled  these  associations  to  in- 
crease their  membership  very  materially.  A  committee  of  the  Federation  was  appointed 
to  consider  the  practicability  of  concentrating  the  freight  auditing  service  in  the  hands 
of  the  Federation. 


^' 


« 


> 


-4 


BEDUOTION  OF  COSTS. 


76 


of  the  association  issued  a  bulletin  calling  attention  to  the  saving  in 
the  cost  of  insurance  that  could  be  effected  if  members  would  equip 
their  factories  with  sprinklers  and  other  fire-preventing  devices.  In 
this  connection,  he  advised  members  that  there  were  a  number  of  con- 
cerns which  made  a  business  of  equipping  plants  with  these  safety 
devices,  furnishing  all  necessary  funds  and  taking  as  their  remunera- 
tion the  saving  effected  in  the  cost  of  insurance. 

In  the  simmier  of  1912  the  National  Implement  &  Vehicle  Associa- 
tion started  a  movement  to  determine  the  interest  of  members  in  the 
establishment  of  an  insurance  department  in  the  association.  After 
investigation,  the  insurance  committee  of  the  association  decided 
that  a  more  practical  plan  would  be  to  engage  the  services  of  a  large 
and  responsible  firm  of  insurance  brokers,  and,  in  February,  1913,  an 
agreement  was  entered  into  with  one  of  these  concerns  whereby  the 
latter  agreed  to  cooperate  with  the  members  of  the  association  in  all 
matters  pertaining  to  the  various  classes  of  insurance  and  to  make 
inspections  of  all  plants  when  desired.  Members  were  requested  to 
correspond  with  these  brokers  and  give  all  information  requested 
without  reservation.  At  the  annual  meeting  of  the  implement  manu- 
facturers in  the  latter  part  of  1913  it  was  announced  that  these  ar- 
rangements had  already  effected  savings  amounting  to  some  thousands 
of  dollars,  the  saving  to  some  members  being  in  excess  of  their  annual 
dues  in  the  association.  It  was  also  announced  that  this  particular 
feature  of  the  association's  activity  had  resulted  in  securing  the  mem- 
bership of  two  large  concerns  with  which  the  secretary  had  been 
negotiating.  The  insurance  committee  pointed  out  that  it  should  not 
be  forgotten  that  the  association  could  help  its  members,  not  only  in 
fire-insurance  matters  but  also  in  respect  to  floater,  liability,  and 
boiler  insurance.  The  members  of  the  association  were  addressed  by 
an  insurance  expert  on  the  subject  of  fire  protection  and  the  expert 
inspection  of  risks  and  policies.  He  emphasized  the  desirability  of 
fire  prevention  and  explained  that  the  savings  in  premiums  in  three 
to  seven  years  would  cover  the  cost  of  installing  automatic  sprinklers 
and  other  devices  to  prevent  fire.  He  pointed  out  that  the  matter  of 
inspections  was  often  of  more  interest  than  the  insurance  rate.* 

^  Dealers  have  also  been  interested  in  plans  to  reduce  the  cost  of  fire  insurance  to  their 
members.  A  movement  to  furnish  dealers  with  fire  protection  at  lower  costs  than  paid 
to  regular  Insurance  companies  led  to  the  adoption  of  a  plan  of  reciprocal  insurance  in 
1897  by  the  members  of  the  Western  Retail  Implement  &  Vehicle  Dealers'  Association, 
composed  of  dealers  in  Kansas  and  Missouri.  An  organization  known  as  the  Reciprocal 
Underwriters  was  formed,  following  a  plan  that  had  been  adopted  by  the  lumber  dealers' 
association  of  Missouri  and  Kansas.  The  Reciprocal  Underwriters  adopted  the  estab- 
Ushed  rate  made  by  the  old-line  insurance  companies,  refunding  at  the  end  of  each  fiscal 
year  that  part  of  the  premiums  that  had  not  been  paid  out  for  losses  or  expenses. 

Other  dealers'  associations  began  to  take  an  interest  in  the  subject  of  mutual  insur- 
ance, largely  because  of  its  importance  as  a  means  of  increasing  membership.  Mutual 
insurance  associations  were  formed  by  members  of  the  dealers'  associations  in  Iowa,  Min- 
nesota, and  other  States.     In  1905  an  arrangement  was  proposed  whereby  the  privilege 


16 


f  ABM-MACHINERY  TKADE  ASSOCUTlONS. 


Section  5.  limiting  credit  riiki. 

Many  implement  dealers  lack  business  experience,  and  the  trans- 
actions between  manufacturers  and  wholesalers,  on  the  one  hand,  and 
dealers,  on  the  other,  are  conducted  largely  upon  a  credit  basis  (see 
p.  7),  so  that  it  is  desirable  for  the  manufacturers,  in  order  to  guard 
against  loss,  to  exercise  care  in  determining  the  extent  to  which  credit 
may  be  safely  extended  to  a  prospective  dealer-agent ;  to  retain  some 
sort  of  security  for  goods  shipped,  in  case  of  insolvency  or  fraud  on 
the  part  of  the  dealer;  and,  further,  to  assist  in  any  movement 
intended  to  improve  the  business  standing  of  dealers  generally. 

Cooperation  in  judging  CREorrs. — The  investigation  of  the  credit 
standing  of  prospective  dealer-customers  has  for  the  most  part  been 
left  by  the  manufacturers'  associations  to  the  individual  members. 
A  credit  system  or  plan  that  had  been  adopted  by  the  southeastern 
department  of  the  National  Wagon  Manufacturers'  Association,  in 
reporting  to  each  factory  undesirable  dealers  or  those  who  engaged 
in  questionable  practices,  was  discussed  and  approved  by  the  execu- 
tive committee  of  the  wagon  association  in  1906.  The  executive  com- 
mittee of  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers  advised  all  members  of  that  association  to 
join  the  National  Association  of  Credit  Men.  A  handbook  of  infor- 
mation on  various  phases  of  the  subject  of  credits,  consisting  of 
articles  contributed  by  members  of  the  credit  committee,  was  pre- 
pared. In  1907  and  1908  members  of  the  National  Plow  Association 
discussed  the  merits  of  a  certain  hardware  credit-reporting  agency, 
but  no  definite  action  appears  to  have  been  taken  beyond  referring 
the  matter  to  the  executive  committee  of  the  association. 

The  installation  of  a  bureau  for  the  exchange  of  credit  informa- 
tion was  an  innovation  proposed  to  be  taken  up  by  the  National 
Implement  &  Vehicle  Association.  This  plan,  it  was  thought,  would 
afford  members  an  opportunity  to  get  reliable  information  from  the 
actual  experience  of  the  dealers'  creditors,  as  shown  by  the  ledger 
transcripts  of  the  latter — something  that  could  not  be  secured 
through  the  channels  then  in  use.  During  1911  the  secretary  and 
general  manager  of  the  association  spent  much  time  investigating 

of  becoming  subscribers  to  the  Reciprocal  Underwriters  was  extended  to  the  members  of 
all  the  constituent  associations  of  the  National  Federation  of  dealers'  associatiODS,  on  the 
same  terms. 

In  lail  the  secretary  of  the  Western  association  stated  that  the  success  of  the  Reclp 
roeal  Underwriters  had  been  phenomenal.  He  asserted  that  It  had  saved  over  54  per 
cfsit  of  the  regular  board  rates,  or  over  a  quarter  of  a  million  dollars  to  its  subscribers. 
He  also  claimed  that  Its  success  had  in  certain  cases  caused  old-line  companies  to  offer 
lower  rates  to  regain  the  business.  The  Retail  Implement  Dealers'  Mutual  Fire  Insurance 
Co.,  of  Minnesota,  has  also  repotted  a  successful  career.  Indeed,  the  secretary  of  the 
company,  who  is  also  secretary  of  the  Minnesota  Retail  Implement  Dealers'  Association, 
asserts  that  the  interest  of  the  members  in  the  association  is  chiefly  In  the  insurance 
feature.  In  short,  the  insurance  branch  of  association  activity  is  looked  upon  as  one  of 
the  strongest  Inducements  to  membership  in  dealers*  aasociationa.  without  which  tiM 
latter  would  lose  one  of  their  beat  drawing  cards.  \ 


. 


^ 


> 


REDUCTION  OF  COSTS. 


77 


the  practical  establishment  of  a  credit-information  exchange  bureau. 
In  August  he  reported  that  after  studying  a  number  of  such  plans 
the  conclusion  had  been  reached  that  for  a  beginning  the  association 
could  not  do  better  than  to  follow  the  rules  under  which  the  National 
Association  of  Credit  Men  operated.  At  the  annual  convention  in 
October,  1911,  however,  the  committee  on  terms  and  credits  reported 
that  the  plan  of  establishing  a  credit  bureau  had  been  temporarily 
set  aside  on  account  of  the  pressure  of  other  important  work. 
They  recommended  that  when  the  bureau  was  inaugurated  it  pro- 
ceed along  the  lines  followed  by  the  National  Association  of 
Credit  Men,  namely,  the  exchange  of  personal  experience  of  those 
interested  in  the  dealer.    This  plan  was  explained  as  follows : 

A  member  submits  a  list  of  names  of  customers  that  he  would 
like  to  secure  information  in  reference  to  how  they  are  paying 
their  bills;  if  they  discount  or  pay  when  due;  the  amount  that 
they  would  be  owing  at  the  time  the  report  was  made,  and  the 
amoimt  of  goods  bought  for  future  delivery.  The  membership 
that  would  be  interested  in  this  account  would  make  report,  and 
in  return  for  this  information  would  get  a  summarized  copy 
from  the  office  as  soon  as  it  could  be  compiled. 

The  report  of  this  committee  suggested  that  the  bureau  might  also 
take  up  the  tracing  of  lost  debtors  and  possibly  the  reporting  of 
insolvent  and  "  judgment-proof  "  concerns,  and  those  who  had  made 
disastrous  failures,  but  were  reengaging  in  business  and  endeavoring 
to  secure  goods  from  members  of  the  association  on  credit.  It  was 
stated  that  such  information  would  not  be  furnished  in  the  form  of  a 
black  list,  nor  anything  of  that  character,  but  by  ways  and  means 
entirely  within  the  law  and  without  liability  to  the  association.  The 
report  concluded  by  recommending  that  a  credit-information  ex- 
change bureau  be  established  as  soon  as  possible.  The  committee 
expressed  the  opinion  that  while  there  was  no  question  of  the  de- 
sirability of  knowing  the  financial  condition  of  customers  some 
method  was  required  to  concentrate  this  information  in  a  systematic 
way  to  be  passed  out  to  the  members  of  the  association.  Subse- 
quently, in  June,  1912,  the  executive  committee  of  the  association 
voted  that  the  credit  exchange  department  be  considered  as  one  of 
the  four  principal  departments  of  association  activity. 

At  the  next  annual  convention  of  the  National  Implement  &  Ve- 
hicle Association,  in  October,  1912,  it  was  reported  that  it  had  been 
found  on  investigation  that  the  establishment  of  the  proposed  credit 
bureau  would  require  a  larger  sum  of  money  than  the  association 
had  at  its  command  and  it  would,  therefore,  be  unwise  to  start  the 
work  until  the  funds  were  at  hand. 

While  these  plans  were  under  discussion  the  secretary  of  the  asso- 
ciation had  made  some  attempt  to  locate  missing  debtors.    In  a  post- 


1' 


78 


ITABM-MACHINEBT  TRADE  ASSOCIATIONS. 


script  to  a  bulletin  issued  in  March,  1911,  he  inquired  if  any  member 
could  furnish  information  as  to  the  whereabouts  of  three  concerns 
whose  names  were  given,  and  in  April,  1911,  another  bulletin  was 
issued  inclosing  two  sheets  on  which  members  were  requested  to  list 
the  names  of  lost  debtors,  one  of  the  sheets  to  be  returned  to  the 
secretary  and  the  other  to  be  retained  by  the  member  reporting.  In 
the  bulletin  inclosing  these  sheets  the  secretary  stated  that  the  find- 
ing of  lost  debtors  could  be  conducted  while  preparations  were  being 
made  for  the  establishment  of  the  credit  bureau.  He  called  atten- 
tion to  the  fact  that  the  membership  of  the  National  Implement  & 
Vehicle  Association  extended  over  the  entire  country  and  that  a  large 
proportion  of  lost  debtors  would  probably  again  engage  in  the  same 
line  of  trade.  He  urged,  therefore,  that  it  would  pay  each  member 
to  have  its  collection  department  furnish  the  association  with  a  list 
of  such  delinquents  to  be  bulletined  under  key  to  the  entire  member- 
ship. On  May  8  a  list  of  some  60  names  that  had  been  received  in 
answer  to  this  bulletin  was  sent  to  each  member  of  the  association, 
who  was  requested  to  turn  the  list  over  to  his  collection  department 
with  the  request  that  any  information  available  be  reported  to  the 
association.  In  sending  names  for  inquiries  of  this  sort  members 
were  asked  not  to  include  any  who  were  not  lost  delinquents  nor  any 
other  than  dealers.  A  few  days  later  a  bulletin  was  issued,  which, 
among  other  things,  stated  there  were  a  number  of  unreliable  debt- 
collecting  agencies  operating  throughout  the  country  on  various 
ingenious  schemes  concerning  which  the  association  could  give  in- 
formation to  its  members. 

Discussion  at  a  meeting  of  the  sales  managers'  department  of  the 
National  Implement  &  Vehicle  Association  in  June,  1913,  brought 
out  the  fact  that  there  was  no  general  practice  among  the  members 
in  requiring  dealer-agents  to  submit  a  statement  of  property.  It  was 
found  that  some  companies  required  such  statements  from  new  cus- 
tomers, others  only  in  cases  of  doubtful  customers.  Some  of  those 
present  reported  that  the  statements  received  were  very  inaccurate, 
due  largely  to  a  lack  of  desire  on  the  part  of  traveling  men  to  get 
them.  It  was  suggested  that  some  time  in  the  future  it  might  be 
possible  to  make  the  association  a  clearing  house  for  property  state- 
ments furnished  by  all  dealers,  copies  to  be  issued  to  manufacturers 
who  were  interested.  Recently  the  National  Implement  &  Vehicle 
Association  has  submitted  to  the  dealers  for  their  consideration  a 
form  of  property  statement  drafted  for  the  purpose  of  securing  uni- 
formity in  the  credit  information  furnished  to  the  manufacturers  by 
the  dealers.  This  proposition  has  been  favorably  received  by  the 
dealen^  Federation.^ 


4 


>  Some  of  the  local  clubs  of  dealers  have  attempted  to  compile  credit  ratings  of  farmers 
tai  their  locality*  but  the  amount  of  work  luTolved  In  such  a  compUation  hac  discouraged 


BEDUCTION  OF  COSTa 


79 


Sbcuritt  for  SALES. — One  of  the  first  committees  created  by  the 
National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 
facturers was  a  committee  on  credits,  to  which  the  association  re- 
ferred the  question  of  the  advisability  of  a  uniform  form  of  contract 
and  kindred  matters  relating  to  credits.  In  January,  1897,  the  presi- 
dent of  the  association  stated  that  a  committee  was  considering  the 
matter  of  uniform  order  blanks  and  financial  exhibits,  but  had  not 
made  sufficient  progress  to  justify  a  report.  So  far  as  shown  in  the 
earlier  records  of  the  association,  however,  this  committee  made  no 
report  on  this  subject.  The  executive  committee  had  already  reached 
the  conclusion  that  the  chattel  mortgage  laws  in  many  States  were 
both  unfair  and  inequitable  to  mortgagor  and  mortgagee  and  had 
appointed  a  committee  to  attempt  to  draw  a  form  of  law  to  cover  all 
of  the  States,  for  the  benefit  of  the  association  and  all  others  indi- 
rectly interested. 

The  secretary  of  the  Western  Retail  Implement  &  Vehicle  Dealers' 
Association  was  present  at  the  second  annual  convention  of  the 
National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 
facturers, in  October,  1895,  and  explained  to  the  manufacturers  the 
efforts  that  had  been  made  by  the  Western  Retail  Implement  & 
Vehicle  Dealers'  Association  to  have  changes  made  in  the  chattel- 
mortgage  law  of  Kansas,  which  provided  that  such  a  mortgage 
should  run  only  for  one  year,  after  which  it  must  be  renewed  if  the 
note  remained  unpaid,  an  additional  fee  being  required  for  recording 
the  renewal.  He  stated  that  his  committee  would  be  glad  to  answer 
inquiries  on  the  subject  from  the  manufacturers  and  receive  their 
suggestions. 

At  the  convention  held  in  November,  1896,  the  chairman  of  the 
committee  on  credits  of  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers  presented  an  oral  report,  in- 
dorsing the  desirability  of  a  "good  straightforward"  bankruptcy 
act,  and  later  a  resolution  was  adopted  by  the  association  authorizing 
the  president  to  prepare  a  petition  to  Congress  to  pass  the  Torrey 
bankruptcy  bill.    In  September,  1899,  the  executive  committee  of  the 

others.  The  experience  of  a  local  organization  of  dealers  in  Jackson  County,  Mich.,  Illus- 
trates this.  The  club  was  organized  In  1904,  and  later,  after  the  members  had  entered 
into  certain  agreements.  Including  one  requesting  all  members  to  add  not  less  than  25  per 
cent,  or  one-fourth  of  the  cost,  to  make  a  selling  price,  It  was  decided  to  adopt  a  code  to 
be  used  in  rating  farmers  living  in  the  county,  the  compilation  to  be  made  from  informa- 
tion furnished  by  members  of  the  club  from  their  experience.  The  plan  was  explained  at 
A  meeting  of  the  State  association  in  1905,  and  one  of  the  members  pointed  out  the  neces- 
sity for  the  dealer  to  have  information  upon  which  to  determine  whether  credit  should  be 
extoided  to  farmers,  especially  to  newcomers.  He  called  attention  to  the  fact  that  the 
various  mercantile  agencies  furnish  such  information  regarding  business  men,  merchants, 
and  manufacturers,  but  it  was  different  in  the  case  of  farmers  to  whom  the  implement 
dealers  sold  goods.  Considerable  difficulty  seems  to  have  been  experienced  in  keeping  the 
information  up  to  date  and  some  of  the  members  of  the  club  have  expressed  the  opinion 
that  the  preparation  of  such  a  list  involves  more  time  and  labor  than  is  warranted  bj  the 


^     k^ 


I 


80 


FABM-MACHINEBT  TItADE  ASSOCIATIONa 


association  decided  to  take  no  action  on  a  suggestion  that  it  appeal  a 
court  decision  in  which  it  was  held  that  labor  liens  had  priority  over 
chattel  mortgages  under  certain  conditions. 

The  matter  of  uniform  State  laws  governing  chattel  mortgages 
was  discussed  at  a  meeting  of  the  executive  committee  in  the  fall  of 
1908  and  referred  to  the  committee  on  State  legislation. 

During  1008  the  National  Association  of  Agricultural  Implement 
&  Vehicle  Manufacturers  arranged  for  its  attorneys  to  draft  forms  of 
sale  and  commission  contracts,  uniform  in  particular  features,  to  be 
used  by  members  of  the  association.  One  of  the  objects  was  to  pro- 
vide for  the  possibility  of  retaining  certain  security  for  goods  sold  or 
delivered  to  a  dealer  in  a  foreign  State  until  the  mtinufacturer  had 
received  settlement  or  payment  therefor.  The  various  forms  drafted 
by  the  attorneys  were  submitted  to  members  for  their  criticism  or 
approvaL 

In  connection  with  a  proposition  to  shorten  terms  (see  p.  35)  the 
National  Wagon  Manufacturers'  Association  during  1907  made  an 
effort  to  devise  a  form  of  commission  contract  which  would  be  more 
favorable  to  the  members  than  the  contracts  then  in  use. 

At  a  meeting  of  the  executive  committee  of  the  National  Plow 
Association  held  in  September,  1909,  the  subject  of  a  uniform  promis- 
sory note  was  brought  up,  but,  as  it  was  a  matter  of  great  importance 
to  manufacturers  in  other  lines,  requiring  legal  advice,  it  was  decided 
to  leave  this  and  two  other  similar  matters  to  the  National  Associa- 
tion of  Agricultural  Implement  &  Vehicle  Manufacturers. 

At  ft  meeting  of  the  sales  managers'  department  of  the  National 
Implement  &  Vehicle  Association  in  June,  1913,  one  of  the  questions 
submitted  for  consideration  was,  "The  title  clause  in  contracts — 
what  is  its  real  value?"  In  discussing  this  topic  many  of  those 
present  reported  that  these  clauses  were  used  for  their  moral  effect 
»nd  because  they  could  generally  be  relied  upon  except  when  the 
dealer  became  involved  in  bankruptcy.  It  was  generally  admitted, 
however,  that  they  should  not  be  considered  in  determining  credit 
risks,  as  the  decisions  of  the  courts  in  bankruptcy  cases  had  impaired 
their  value. 

CitEorrs  IN  THE  THRESHER  TRADE. — ^Thrcshing  outfits,  consisting  of 
engine  and  separator  with  an  attachment  for  stacking  straw  and 
chaff,  are  usually  sold  to  a  distinct  class  of  purchasers,  called  thresh- 
ermen,  who  thresh  grain  on  contract.  The  outfits  are  so  expensive 
that  few  of  the  purchasers  are  able  to  pay  for  them  in  cash.  This 
makes  it  necessary  for  the  manufacturers  to  sell  to  them  on  credit, 
taking  assignments  of  earnings  as  security.  The  investment  of  capi- 
tal over  such  long  periods,  and  the  expense  of  collecting  amounts 
due  on  the  obligations  of  the  threshermen,  and  in  keeping  track  of 
the  latter  to  avoid  losses  and  to  protect  security  of  the  character 


A 


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^ 


EEDUCTION  OF  COSTS. 


81 


^ 


mentioned,  cause  heavy  expenses  to  the  manufacturers.  Indeed,  the 
principal  matter  considered  at  the  first  meeting  of  the  thresher 
manufacturers  in  1884  was  the  prevailing  custom  of  extending  cred- 
its to  purchasers.  It  was  held  to  be  the  most  urgent  problem  then 
demanding  attention,  and  it  was  decided  that  the  extreme  terms  to 
be  made  should  provide  for  full  payment  not  later  than  the  first  day 
of  the  third  January  following  the  sale.  The  records,  however,  do 
not  show  how  closely  this  plan  was  adhered  to.  The  thresher  asso- 
ciation maintained  a  bureau  from  1898  to  1902  to  furnish  data  to 
enable  members  to  act  wisely  in  the  matter  of  extending  credits. 
In  November,  1909,  the  association  adopted  the  following  resolution : 

Resolved^  That  it  is  the  sense  of  this  Association  that  for  the 
year  1911  no  greater  discount  be  allowed  for  cash  than  6  per  cent 
to  agents  or  purchasers ;  that  on  single  sales  the  agents  be  allowed 
a  maximum  discount  of  5  per  cent  if  cashed  in  thirty  days  from 
date  of  delivery,  and  that  the  date  for  agents  cashing  all  his 
season's  business  be  fixed  (not  exceeding  ninety  days  from  date 
of  delivery)  in  the  agent's  contract  when  made,  and  that  pur- 
chasers be  not  allowed  any  cash  discount  later  than  ninety  days 
from  delivery  of  the  goods. 

This  resolution  was  affirmed  in  April,  1910.  It  was  reaffirmed  and 
somewhat  amplified  at  a  meeting  in  November,  1910,  when  the  follow- 
ing resolution  was  adopted : 

Resolved^  that  it  is  the  sense  of  this  Association  that  in  1911, 
no  greater  discount  will  be  allowed  for  cash  than  six  per  cent,  to 
the  purchaser,  and  that  purchaser  be  allowed  no  cash  discount 
later  than  October  1st,  of  the  year  in  which  sale  is  made. 

That  the  maximum  discount  to  the  agent  be  five  per  cent  on 
single  sales  if  the  sale  is  cashed  in  thirty  days  from  date  of 
delivery  and  that  the  date  of  the  agent's  cashing  all  the  season's 
business  be  fixed  in  the  agency  contract  not  later  than  December 
1st  of  the  year  in  which  the  sale  is  made  at  a  discount  for  cash 
not  to  exceed  six  per  cent  plus  interest  from  October  1st. 

In  the  latter  part  of  1911  this  plan  was  reported  to  be  produc- 
ing satisfactory  results,  and  all  members  favored  its  continuance, 
but  in  1912  it  was  reported  that  more  complaints  on  price  cutting 
and  selling  on  extremely  long  terms  had  been  received  than  ever 
before.  In  1913  several  matters  affecting  credits  were  discussed, 
among  them  that  some  cash  payment  should  be  insisted  on  in  each 
case;  that  the  period  of  credit  on  separators  and  small  outfits  be 
restricted  to  two  years,  with  an  extreme  period  of  three  years  on  any 
kind  of  threshing  machinery.  Resolutions  were  adopted  recom- 
mending that  members  endeavor  to  increase  cash  payments  and  to 
bring  about  shorter  terms. 

Improving  financial  condition  of  dealers. — One  of  the  objects  of 
the  systematic  campaign  (see  pp.  218-243)  undertaken  by  the  manu- 
facturers to  educate  dealers  to  a  better  knowledge  of  their  costs  of 

68248"— 15 6 


82 


FABM-MACHINEBY   TBADE  ASSOCIATIONS. 


BEDUCTION   OF   COSTS. 


83 


doing  business  was  to  improve  the  financial  condition  of  the  latter  in 
order  to  make  them  better  credit  risks.  It  was  felt  that  if  the  retail 
implement  business  could  be  put  upon  a  more  profitable  basis  much 
would  be  accomplished  toward  lessening  the  large  number  of  failures, 
retirements,  and  other  changes  taking  place  among  the  dealers  each 
year. 

The  effort  of  the  National  Implement  &  Vehicle  Association  to 
establish  a  sales  managers'  department  was  due  largely  to  the  in- 
fluence which  it  was  believed  that  such  a  department  could  exert 
in  carrying  on  the  cost-educational  movement,  and  apparently  to 
impress  the  members  with  the  importance  of  the  cost-educational 
work  as  a  matter  of  improving  credit  risks.  A  resolution  was 
adopted  in  October,  1911,  requesting  the  members  of  the  association 
to  instruct  their  salesmen  to  take  up  and  discuss  the  subject  of  the 
cost  of  doing  business  with  the  retail  dealers  with  whom  they  came 
in  contact,  with  a  view  to  improving  the  condition  of  the  retailers, 
and  thus  making  them  more  permanent  in  the  trade  than  had  been 
the  rule  theretofore.  Shortly  after  the  convention  the  secretary  and 
general  manager  issued  a  bulletin  impressing  upon  members  the  fact 
that  it  was  necessary  for  them  to  do  something  more  than  merely  sell 
goods  to  the  dealer  if  they  desired  permanent  customers.  He  pointed 
out  that  resolutions  mean  nothing  unless  they  are  followed,  and 
inquired  of  each  member  what  he  was  doing  to  improve  the  condi- 
tions of  the  customers  who  needed  it  and,  furthermore,  if  the  mem- 
bers had  ever  requested  their  travelers  to  make  an  effort  to  induce 
dealers  to  reckon  their  costs  in  order  to  know  positively  whether  they 
were  making  a  profit.  He  stated  that  both  he  and  the  cost  committee 
of  the  association  would  appreciate  information  as  to  what  each  mem- 
ber  was  doing  along  these  lines. 

This  bulletin  was  followed  by  another  in  November,  1911,  on  the 
subject  of  "Cost  education:  What  it  means  to  you  and  your  cus- 
tomers," in  which  it  was  stated  that  the  number  of  answers  received 
in  reply  to  the  former  bulletin  had  not  been  very  large.  In  com- 
menting upon  the  value  of  the  work  the  secretary  and  general 
manager  went  on  to  say: 

We  have  always  contended  that  credit  could  not  be  safely 
extended  without  some  knowledge  of  the  business  experience  of 
the  applicant,  and  whether  he  has  qualified  by  reason  of  this 
experience,  or  business  knowledge,  to  succeed.  We  also  had  the 
impression  that  the  retailers  of  the  lines  we  represent  needed 
business  education,  perhaps  more  than  any  other.     ♦     ♦     ♦ 

It  is  difficult  to  refuse  an  ex-farmer  credit  who  has  a  deposit 
of  $5,000  in  the  bank  and  a  good  reputation  for  honor  and  integ- 
rity in  the  community,  still  unless  you  or  your  travelers  do 
something  to  help  him  get  started  in  the  safe  business  lines,  the 


Jj 


-1 


•1^ 


./ 


> 


^ 


chances  are  that  he  will  eventually  fail,  losing  all  his  own  money 
and  a  lot  belonging  to  you  or  some  one  else  who  is  unfortunate 
enough  to  stick  to  him  until  the  crash  comes. 

♦  *  *  Y^Q  are  firmly  of  the  belief  that  the  sooner  that  all 
our  members  realize  that  it  is  profitable  to  assist  their  customers 
in  this  way,  the  sooner  we  shall  have  better  conditions  prevailing 
in  the  retail  trade.  If  some  one  connected  with  each  house 
would,  every  thirty  days,  send  to  their  selling  forces  information 
of  this  character,  either  original  or  borrowed,  the  improvement 
would  be  noticeable  within  a  very  short  time,  just  as  the  efforts 
made  by  the  dealers  themselves  to  spread  cost  education  through 
their  conventions,  etc.,  has  brought  about  very  satisfactory 
results. 

The  importance  of  the  cost-educational  work  of  the  association  was 
discussed  and  emphasized  at  a  meeting  of  the  executive  committee 
held  December  23,  1911,  and  the  conclusion  was  reached  that  it 
should  be  urged  at  every  opportunity,  especially  in  its  relations  to 
the  retail  dealer.  In  this  connection,  the  secretary  of  the  association 
was  instructed  to  ascertain  how  the  Western  Retail  Implement  & 
Vehicle  Dealers'  Association  would  regard  a  proposition  to  employ 
an  expert  bookkeeper  and  cost  accountant  in  the  territory  of  the 
members  for  a  year,  the  cost  to  be  divided  between  the  two  asso- 
ciations. 

A  meeting  of  the  sales  managers  of  the  National  Implement  & 
Vehicle  Association  was  held  at  Chicago  in  February,  1912.  One 
of  the  topics  discussed  was  the  responsibility  of  the  salesman  as  to 
credits.  The  matter  of  cost  education  as  related  to  dealers  was  con- 
sidered and  a  thorough  consideration  given  to  what  could  be  done 
by  the  sales  managers  through  their  travelers  or  otherwise  to  improve 
existing  conditions.  At  this  meeting  a  former  manager  of  a  branch 
jobbing  house  at  Kansas  City  outlined  some  of  the  benefits  that 
would  accrue  from  a  sales  managers'  department,  citing  his  experi- 
ence where  the  cultivation  of  better  acquaintance  with  his  com- 
petitors had  been  worth  thousands  of  dollars  in  handling  trade  and 
in  the  making  of  credits.  The  sales  managers  present  at  this  meeting 
indicated  their  interest  in  the  cost-educational  work  by  unanimously 
expressing  their  willingness  to  aid  the  work  and  support  a  feasible 
plan  when  devised.  No  verbatim  report  was  made  of  the  personal 
experiences  recited  at  this  meeting,  since  it  was  thought  best  that  the 
utmost  freedom  of  expression  should  prevail.  In  the  bulletin  con- 
taining a  report  of  this  meeting,  members  of  the  association  were 
reminded  that  it  was  their  duty  to  build  up  the  sales  managers'  de- 
partment, not  only  by  their  personal  attendance  but  also  by  urging 
competitors  to  attend. 

The  efforts  that  have  been  made  to  carry  on  the  cost-educational 
work  are  described  in  more  detail  elsewhere.     (See  Chap.  VII,  sec.  5.) 


^ 


84 


PARM-MACHINEBY  TRADE  ASSOCIATIONS. 


J 


BEDUCTION  OF  COSTS. 


85 


Section  6.  Beduotion  in  costs  of  distribution. 

Manufacturers,  wholesalers,  and  dealers  alike  contend  that  there 
are  certain  unnecessary  or  excessive  expenses  that  have  grown  up 
under  the  present  system  of  selling  through  retail  dealers.  Manu- 
facturers and  wholesalers  complain  of  various  practices  on  the  part 
of  dealers  that  tend  to  increase  selling  costs,  while  dealers  believe 
that  unduly  aggressive  competition  on  the  part  of  manufacturers 
and  wholesalers  has  a  similar  tendency.  Furthermore,  manufac- 
turers, jobbers,  and  dealers  alike  are  opposed  to  price  cutting  by 
dealers.  Nevertheless  all  classes  in  the  trade  recognize  that  if  the 
dealer  is  to  continue  to  be  an  important  factor  in  the  distribution  of 
machines  the  system  of  which  he  is  a  part  must  not  impose  too  great 
an  expense  upon  the  industry.  This  is  looked  upon  as  a  vital  prob- 
lem, the  solution  of  which  requires  close  cooperation  between  the  vari- 
ous manufacturers  and  wholesalers,  and  also  between  manufacturers 
and  wholesalers  on  the  one  hand  and  dealers  on  the  other. 

The  smaller  manufacturers  and  wholesalers  are  especially  con- 
cerned with  the  increasing  cost  of  distribution.  The  recent  develop- 
ment of  several  large  companies  into  full-line  houses,  with  excep- 
tional financial  resources,  carrying  a  large  variety  of  the  principal 
kinds  of  farm  machinery,  has  been  a  matter  of  deep  concern  to 
smaller  companies.  The  abundant  resources  of  the  large  companies 
permit  them  to  employ  expensive  selling  organizations,  to  spend 
much  money  for  advertising,  and  to  carry  goods  with  dealers  on  con- 
signment or  on  unusually  long  terms.  By  these  means  the  larger 
companies  absorb  the  services  of  an  undue  proportion  of  the  total 
number  of  dealers.  The  net  result  of  the  situation  is  that  the  smaller 
short-line  manufacturers  are  seriously  handicapped  by  the  expense  to 
which  they  are  put  in  selling  the  output  of  their  factories.  In  many 
cases  it  is  probably  true  that  the  aggregate  selling  expenses  of  the 
manufacturer,  the  wholesaler,  and  of  the  dealer,  equals  or  exceeds  the 
factory  cost  of  goods. 

Owing  perhaps  to  the  fact  that  the  larger  manufacturers  are  mem- 
bers of  the  National  Implement  &  Vehicle  Association,  no  positive 
action  along  fundamental  lines  has  been  taken  by  that  organization  to 
relieve  the  smaller  concerns.  Members  of  that  association,  however, 
are  strongly  impressed  with  the  necessity  for  curtailing  what  is  de- 
scribed as  the  "  increasing  cost  of  distribution."  In  October,  1913,  the 
chairman  of  the  executive  committee  of  the  National  Implement  & 
Vehicle  Association  told  the  delegates  to  the  National  Federation  of 
dealers'  associations  that  this  is  one  of  the  greatest  problems  now 
confronting  the  manufacturer.  The  delegates  were  urged  to  make 
vigorous  and  persistent  use  of  their  influence  in  eliminating  certain 
practices  by  which  the  manufacturers  thought  the  cost  of  distribu- 


m 


— ( 


M 


^ 


tion  was  unnecessarily  increased.  Specific  practices  of  this  sort  that 
were  complained  of  by  the  manufacturers,  included  excessive  de- 
mands upon  the  manufacturer  for  donations,  and  for  personal  and 
financial  help  in  selling  and  setting  up  goods  sold  to  farmers;  expense 
arising  from  failure  of  dealers  to  live  up  to  the  terms  of  their  agency 
contracts,  and  from  failure  to  pay  adequate  attention  to  new  and  use- 
ful machines;  lax  methods  of  conducting  business;  and  excessive 
demands  for  carrying  over  unsold  goods.  On  account  of  the  great 
number  of  new  dealers  who  enter  the  retail  implement  trade  each 
year  the  manufacturers  believe  that  a  constant  campaign  is  needed  to 
agitate  matters  of  this  kind. 

The  entire  Federation  was  invited  to  be  present  at  the  annual 
convention  of  the  National  Implement  &  Vehicle  Association  in 
October,  1913.  In  extending  this  invitation  the  secretary  of  the 
National  Implement  &  Vehicle  Association  said : 

The  time  has  arrived,  we  believe,  that  the  retailer  of  the  lines 
we  represent  ought  to  understand  fully  the  situation  relative  to 
the  manufacture  of  these  lines  and  the  problem  connected 
with  it. 

At  this  convention  one  of  the  features  was  a  discussion  between 
the  chairman  of  the  executive  committee  of  this  association  and  the 
president  of  the  Iowa  implement  dealers'  association  on  the  subject 
of  problems  of  distribution,  the  object  being  to  find  some  way  to 
reduce  selling  costs  by  the  process  of  elimination  of  needless  expense. 
The  Bulletin,  the  official  organ  of  the  federated  dealers'  associations, 
in  commenting  upon  this  discussion,  expressed  the  hope  that  it  would 
do  much  toward  securing  that  real  cooperation  between  manufac- 
turer and  dealer  which  it  was  apparent  had  become  necessary  if  the 
dealer  was  to  continue  to  be  the  medium  through  which  the  product 
of  the  implement  factory  reaches  the  farmer.  At  this  convention  of 
the  manufacturers'  association  a  resolution  was  adopted  urging  upon 
members  the  positive  necessity  of  reducing  to  a  minimum  the  cost  of 
marketing  products  and  soliciting  the  cooperation  of  the  dealers. 

The  dealers  recognize  the  fact  that  the  manufacturer  will  natu- 
rally endeavor  to  reach  the  user  of  his  products  through  the  channel 
that  affords  the  greatest  volume  of  business  at  least  cost  for  distri- 
bution. In  referring  to  this  fact  the  secretary  of  the  Western  asso- 
ciation declared  that  the  dealers  have  it  in  their  power  to  demon- 
strate that  they  offer  the  cheapest  channel  of  distribution  and  that 
they  must  make  this  fact  clear  to  the  manufacturers. 

While  the  danger  to  the  regular  implement  dealers  of  competi- 
tion from  direct  selling  concerns  is  believed  by  many  to  have  been 
greatly  exaggerated,  one  result  has  been  to  create  a  belief  among 
dealers  that  they  are  required  to  pay  too  much  for  goods  sold  to  them 
through  wholesale  houses.    Furthermore,  the  federated  dealers'  asso- 


»    . 


86 


FABM-MACHINEBT  TBADE  ASSOCIATION& 


REDUCTION  OF  COSTS. 


87 


eiations  claim  that  they  aro  studying  methods  of  catalogue  houses  to 
enable  the  dealers  to  compete  with  them  successfully.  In  this  connec- 
tion the  question  has  been  raised  whether  there  is  not  some  way  in 
which  dealers  can  get  nearer  the  source  of  supply.  The  solution  of  this 
problem  through  cooperative  buying  in  quantity  direct  from  the  fac- 
tories, by  uniting  the  orders  of  a  number  of  dealers,  has  been  opposed 
by  manufacturers.  Another  plan  under  which  it  is  proposed  that 
dealers  shall  sell  from  syndicate  catalogues  and  deliver  goods  ordered 
therefrom  has  met  with  little  favor  from  the  regular  trade  and  has 
been  disapproved  by  the  National  Federation  of  Implement  & 
Vehicle  Dealers'  Associations. 

The  dealers'  associations  have  made  little  progress  in  efforts  to 
secure  lower  prices  from  manufacturers  and  wholesalers,  through 
the  curtailment  of  expense  which  they  claim  could  be  effected  if  man- 
ufacturers and  wholesalers  would  discontinue  the  employment  of 
canvassing  salesmen  and  the  sale  of  goods  on  extremely  long  terms. 
In  this  direction  the  interests  of  regular  dealers  and  of  manufac- 
turers without  exceptional  resources  are  much  the  same.* 

One  of  the  most  recent  proposals  of  the  dealers  to  reduce  the  cost 
of  distribution  is  to  reduce  the  needless  variety  of  different  types 
and  sizes  of  different  kinds  of  farm  machinery  and  implements, 
which  it  has  been  customary  for  dealers  to  carry  in  stock.  This 
method  of  reducing  costs  was  brought  up  by  the  National  Federa- 
tion at  a  conference  with  manufacturers  representing  the  National 
Implement  &  Vehicle  Association  in  October,  1913.  The  latter  as- 
sured the  dealers  that  the  manufacturers  were  even  more  deeply 
interested  in  the  advantages  of  standardization  than  were  the  dealers. 
The  dealers  were  told  that  the  farm-wagon  department  of  the  Na- 
tional Implement  &  Vehicle  Association  was  then  engaged  in  an 
effort  to  standardize  wagon  construction  to  the  extent  of  eliminating 
certain  sizes  and  that  it  was  expected  that  the  wagon  manufacturers 
would  soon  present  a  request  for  the  cooperation  of  the  dealers. 

The  character  of  the  warranty,  as  an  element  in  the  costs  of  dis- 
tribution, has  been  a  matter  of  difference  between  competing  manu- 
facturers, and  also  between  manufacturers  and  dealers.  As  between 
manufacturers  and  dealers  the  question  of  warranty  is  as  to  which 
shall  beai*  the  expense  of  replacing .  broken  parts.  Manufacturers 
claim  that  dealers  are  too  liberal  in  this  respect,  especially  when  the 
expense  can  be  shifted  to  the  former. 

The  matter  of  warranties  came  up  prominently  in  1913  by  reason 
of  legislation  on  the  subject  which  had  been  passed  in  the  Prov- 
ince of  Alberta,  Canada,  and  in  the  State  of  North  Dakota.  The 
Alberta  act  provided  that  notwithstanding  any  agreement  farm  ma- 

1  See  report  of  the  Commissioner  of  Corporations  on  the  International  Harvester  Co., 
pp.  270-288. 


#' 


#'< 


f  ■> 


chinery  should  be  sold  under  an  implied  warranty  guaranteeing  it 
to  be  of  good  material,  to  be  properly  constructed  both  as  to  design 
and  workmanship,  to  be  in  good  working  order  to  satisfactorily  per- 
form the  work  for  which  it  was  intended,  to  be  free  from  latent  and 
other  defects,  and  to  be  in  every  way  so  designed  and  constructed  as 
with  proper  care  and  use  to  have  reasonable  durability.  It  was  felt 
by  members  of  the  National  Implement  &  Vehicle  Association  that 
this  law  would  work  a  great  hardship  upon  every  manufacturer 
selling  goods  in  that  province.  Later  it  was  announced  that  the  act 
had  resulted  in  the  withdrawal  of  a  number  of  concerns  from  doing 
business  in  Alberta  and  had  caused  others  to  restrict  their  business 
to  those  only  who  were  considered  choice  credits,  and  it  was  asserted 
that  the  law  bore  even  more  heavily  upon  the  farmer  whom  it  was 
intended  to  benefit.  It  was  thought  that  the  law  would  render  the 
manufacturers'  collections  difficult,  and  it  was  reported  that  several 
instances  had  occurred  where  farmers  had  repudiated  their  obliga- 
tions. The  passage  of  a  similar  law  in  North  Dakota  in  1913  (Ses- 
sion Laws,  chap.  218)  was  also  called  to  the  attention  of  the  members 
of  the  National  Implement  &  Vehicle  Association  in  an  effort  to 
arouse  them  to  protest  the  passage  of  such  laws.  These  laws  were 
regarded  as  having  been  brought  about  by  the  unfair  dealings  of 
one  or  more  concerns,  although  the  law  placed  the  restriction  upon 
all.  The  secretary  urged  that  an  effort  be  made  to  enlighten  both 
dealers  and  consumers  as  to  the  ultimate  effect  of  such  laws  in  in- 
creasing the  expense  of  doing  business  and  in  advancing  prices. 

At  the  present  time  (March,  1915)  both  the  National  Implement 
&  Vehicle  Association  and  the  National  Federation  of  Implement  & 
Vehicle  Dealers'  Associations  are  active  in  devising  methods  of 
eliminating  and  curtailing  the  expenses  incident  to  the  sale  of  farm 
machinery  through  the  retailer.  At  the  annual  meeting  of  the  Na- 
tional Implement  &  Vehicle  Association  in  October,  1914,  the  retiring 
president  stated  his  belief  that — 

no  problem  confronting  us  today  exceeds  in  importance  that  of 
economically  marketing  and  distributing  our  products. 

The  report  of  the  executive  committee  of  the  association  pointed 
out  that  the  expense  of  selling  farm  machinery  had  increased  very 
materially  from  year  to  year  until  it  had  become  one  of  the  manu- 
facturers' heaviest  burdens.  The  committee  on  dealers'  associations, 
however,  declared  that,  so  far  as  agricultural  implements  are  con- 
cerned, the  retail  dealer  is  a  necessity  and  is  the  best  medium  in  the 
distribution  of  the  manufacturers'  goods  to  farmers.  The  report  of 
this  committee  called  attention  to  the  expense  involved  in  the  tend- 
ency on  the  part  of  manufacturers  and  dealers  to  yield  to  demands 
for  excessive  service.    It  also  cautioned  the  manufacturers  against 


«f-  i  '■''  ^ 


88 


FARM-MACHINERY  TRADE  ASSOCIATIONS. 


placing  agencies  too  close  together  and  against  overloading  dealers 
with  more  goods  than  they  require. 

At  this  convention  the  sales  managers'  department  reported  that 
its  members  had  held  two  important  conferences  with  the  dealers 
during  the  year,  at  which  various  topics  of  mutual  mterest  had  been 
discussed.  At  these  conferences  various  suggestions  for  the  more 
economical  conduct  of  the  retail  trade  were  considered,  such  as  the 
more  careful  use  of  advertising  matter  sent  to  dealers  for  distribu- 
tion, cooperation  in  replacing  defective  parts  and  in  returning  them 
to  the  factory,  and  the  use  of  a  common  form  of  property  statement 
to  be  submitted  by  dealers  seeking  credit  for  goods  ordered.  The 
most  important  result  of  the  conferences  between  the  manufacturers 
and  dealers  appears  to  have  been  the  appointment  of  the  secretaries 
of  the  various  constituent  associations  of  the  Federation  as  a  commit- 
tee to  act  with  the  manufacturers'  association  in  an  effort  to  advance 
the  standardization  movement  by  assisting  in  the  elmiination  of  un- 
necessary sizes  and  types  of  machines,  wagons,  etc.  This  step  was 
taken  at  the  request  of  the  manufacturers  that  the  Federation  appoint 
a  committee  for  this  purpose.  In  making  this  request  the  manufac- 
turers declared  that,  unless  such  standardization  could  be  effected, 
they  would  be  compelled  to  advance  prices.  Furthermore,  they  as- 
serted that  the  standardization  could  not  be  accomplished  without  the 
cooperation  and  support  of  the  dealers.  At  the  meeting  of  the 
Federation  held  in  October,  1914,  the  delegates  adopted  the  following 
resolution : 

By  the  ever  increasing  multiplicity  of  styles  and  sizes,  manu- 
facturers and  jobbers  have  added  cost  upon  cost  to  their  overhead 
expense.  There  are  too  many  travelers,  executives  and  canvassers 
who  add  to  the  cost  of  the  goods  to  the  dealer.  Many  of  these 
wastes  m  cost  of  distribution  should  be  eliminated  and  all  un- 
usual styles  and  sizes  should  be  discontinued.  Keforms  along 
this  line  should  be  assisted  by  the  retail  dealer,  so  that  he  may  be 
enabled  to  sell  goods  at  lower  prices  to  the  consumer,  obtain  a 
fair  profit  and  give  good  service. 

At  the  same  meeting  at  which  the  above  resolution  was  passed  and 
at  which  the  secretaries  of  the  various  associations  were  appointed  as 
a  committee  on  standardization,  the  Federation  delegates  also  ap- 
pointed a, committee  to  investigate  and  report  at  the  next  annual 
meeting  whether  some  plan  could  not  be  adopted  by  which  dealers 
could  get  some  of  the  smaller  articles  in  their  line,  outside  of  trade- 
marked  goods,  at  lower  prices. 


^ 


*5 


-< 


T 


m 


; 


'J^m 


CHAPTER  IV. 

ACTIVITIES  OF  MANUFACTURERS'  ASSOCIATIONS  WITH  RESPECT 

TO  LEGISLATION. 

Section  1.  Introduction. 

The  executive  committee  of  the  National  Association  of  Agricul- 
tural Implement  &  Vehicle  Manufacturers  was  given  general  charge 
of  all  matters  of  legislation  affecting  members  and  their  patrons. 
A  standing  committee  on  legislation  was  created,  with  instructions 
to  keep  a  sharp  lookout  for  such  matters,  but  its  duties  were  after- 
wards divided  between  a  committee  on  national  legislation  and  one 
on  State  legislation.  In  1895  the  committee  on  legislation  recom- 
mended that  the  efforts  of  the  association  in  the  matter  of  legislation 
should  not  be  confined  to  the  prevention  of  obnoxious  laws  or  their 
repeal  when  enacted,  but  that  effort  should  be  made  to  frame  and 
secure  the  passage  of  laws,  both  State  and  national,  that  would 
protect  and  promote  the  interests  of  the  members  without  impairing 
the  rights  or  interests  of  the  general  public.  To  secure  the  enact- 
ment of  such  kws,  the  executive  committee  was  empowered  to  confer 
with  other  associations  of  manufacturers  with  reference  to  coopera- 
tive action. 

In  1895,  the  executive  conmiittee  was  authorized  to  subscribe  to 
the  membership  of  the  National  Association  of  Manufacturers  and 
to  appoint  delegates  to  its  next  convention.  In  October,  1898,  a  so- 
called  conference  committee  was  given  charge  of  proposed  coopera- 
tion with  kindred  associations  to  secure  national  legislation,  and  in 
October,  1908,  a  recommendation  was  approved  that  the  association 
cooperate  with  the  National  Association  of  Manufacturers  along  such 
lines  as  their  common  interests  might  justify.  The  same  year  a  pro- 
posal was  made  to  employ  men  at  State  capitals  to  report  on  measures 
introduced  in  State  legislatures,  and,  for  a  time,  a  committee,  known 
as  the  "  States  Committee,"  was  maintained  with  a  member  in  each 
State  to  look  after  legislation  and  report  all  obnoxious  measures.  In 
1910,  however,  the  States  committee  was  discontinued. 

So  far  as  shown  by  the  records,  the  wagon,  plow,  and  grain-drill 
manufacturers'  associations,  as  organizations,  gave  little  attention  to 
matters  of  legislation.  Many  of  the  members  of  these  associations 
were  also  members  of  the  National  Association  of  Agricultural  Im- 
plement &  Vehicle  Manufacturers,  and,  largely  for  this  reason,  legis- 


•III 


rARM-MACHINERY  TRADE  A8800IATI0NS. 


> 


ACTIVITIES  WITH  RESPECT  TO   LEGISLATION. 


n 


lative  matters  were  left  to  be  handled  by  the  latter  association,  which, 
with  its  larger  membership,  was  thought  to  be  more  influential. 

The  principal  matters  of  legislation  to  which  the  manufacturers' 
associations  have  devoted  attention,  are  those  relating  to  taxation 
of  corporations,  industrial  indemnity,  and  manufacturing  opera- 
tions ftt  State  penal  institutions.  Considerable  attention  has  also 
been  given  to  legislation  relating  to  credits  and  collections,  the  tariff, 
and  patents. 

The  associations  of  implement  dealers  have  l»een  most  active  in 
opposing  the  enactment  of  parcel-post  legislation  (see  p.  198),  and 
have  also  given  much  attention  to  legislation  relating  to  manufac- 
turing operations  at  State  penal  institutions  (see  p.  107)  and  to  com- 
mercial transactions.  In  such  matters  they  have  sometimes  received 
the  support  of  the  jobbers'  club  in  the  same  distributing  territory. 

The  matter  of  employing  legal  counsel  to  look  after  the  general 
interest  of  the  association  was  brought  up  at  a  meeting  of  the  execu- 
tive committee  of  the  National  Association  of  Agricultural  Imple- 
ment &  Vehicle  Manufacturers  in  January,  1897,  but  it  was  thought 
best  to  ascertain  what  the  National  Association  of  Manufacturers 
proposed  doing  in  the  matter.  In  November,  1898,  the  chairman  of 
the  executive  committee  was  authorized  to  employ  legal  counsel  when- 
ever he  found  it  necessary  to  do  so.  In  November,  1900,  a  committee 
on  attorneys  and  litigation  was  created,  and  the  chairman  was  in- 
structed to  accept  the  proposition  of  a  firm  of  Chicago  attorneys  to 
act  as  counsel  for  the  association.  Since  1900  this  arrangement  has 
apparently  been  renewed  annually.  By  direction  of  the  association 
the  attorneys  have  conducted  litigation  in  which  the  association  has 
been  interested,  especially  suits  to  determine  the  rights  of  foreign 
corporations  under  the  laws  of  various  States. 

The  National  Implement  &  Vehicle  Association  has  continued  the 
work  in  respect  to  legislation  and  litigati(m  formerly  conducted  by 
the  National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 
facturers. The  standing  committees  on  attorneys  and  litigation, 
national  legislation,  State  legislation,  tariff,  patents,  and  others, 
have  been  retained.  Furthermore,  at  the  convention  in  October, 
1911,  a  committee  on  political  action  was  created,  to  secure  united 
political  action  on  the  part  of  business  men  against  what  was  char- 
acterized as  existing  tendencies  toward  adverse  class  legislation.  In 
recommending  this  step,  the  committee  on  State  legislation  reported, 
in  part,  as  follows: 

Your  committee  are  of  the  opinion  that  the  public  should  know 
and  realize  the  importance  of  these  conditions,  and  that  it  is  up 
to  the  business  men  of  this  countrv  to  act  together  as  a  unit 
upon  this  problem,  for  upon  its  solution  along  right  lines  de- 
pends as  much  as  upon  any  other  one  thing  the  future  growth 


i 


<^  I  % 


t  |> 

4  r  P 


and  prosperity  of  this  country.    And  again  we  emphasize,  in 
this  connection,  the  importance  of  the  business  men  unitmg  for 

political  action. 

♦  ♦  *  Throughout  this  report  we  have  endeavored  to  point 
out  to  you,  as  your  committee  sees  it,  the  importance  of  business 
men  entering  the  political  field,  and  we  have  intentionally  stated 
business  men  instead  of  business  interests,  because  the  trend  of 
recent  legislation,  National  as  well  as  State,  has  been  against  the 
corporation  and  "  the  interests,"  so  called,  and  which  at  the  out- 
set was  aimed  at  the  big  interests  known  as  the  trusts  and  later 
at  the  railroads,  but  which  to-day,  if  not  being  actually  leveled 
at,  is  reacting  upon  all  legitimate  business  interests,  and  justly 
or  unjustly,  our  businesses  are  all  being  tarred  with  the  same 
stick,  known  by  both  political  parties  as  "the  interests,"  and, 
therefore,  practically  speaking,  we  are  all  political  outcasts. 

In  the  minds  of  your  committee,  the  important  step  to  be  taken 
now  is  the  formation  of,  or  domination  of  a  political  organiza- 
tion which  shall  be  of  sufficient  strength  and  sanity  to  keep  us 
safely  building  upon  the  foundation  structure  of  our  constitu- 
tion and  not  upon  the  quick  sands  of  many  of  the  present-day 
political  theories. 
The  committee  on  political  action  was  invited  to  be  present  at  a 
congress  of  the  National  Business  League  of  America,  described  as 
"  an  alliance  of  leading  diversified  interests  of  the  United  States  for 
the   promotion    of   national    legislation    and    the    advancement   of 
American  commerce  and  industries."     This  congress,  held  at  Chi- 
cago in  the  latter  part  of  1911,  authorized  the  appointment  of  a  com- 
mittee to  formulate  a  declaration  of  principles  and  purposes,  reflect- 
ing the  demands  of  the  commercial,  industrial,  and  business  interests 
represented— something   that   the   two   dominant    political   parties 
might  be  asked  to  embody  in  their  platforms.    The  executive  com- 
mittee of  the  National  Implement  &  Vehicle  Association  directed  its 
committee  on  political  action  to  continue  negotiations  and  cooperate 
with  the  National  Business  League  and  report  to  the  executive  com- 
mittee  of  the   National   Implement   &   Vehicle   Association   when 
definite  action  was  finally  determined  upon.    The  National  Business 
League  held  another  meeting  in  June,  1912,  and  adopted  the  plat- 
form that  had  been  formulated  by  its  committee.    The  resolutions 
adopted    by    the    National    Implement    &    Vehicle    Association    in 
October,  1912,  substantially  embodied  this  platform. 

The  report  of  the  committee  on  State  legislation  at  the  convention 
in  October,  1912,  referred  to  the  organization  of  the  Chamber  of 
Commerce  of  the  United  States  of  America  at  Washington,  D.  C, 
in  April,  1912,  for  the  purpose  of  forming  a  representative  body 
of  commercial  organizations  and  interests  which  by  representation 
could  be  consulted  in  relation  to  the  commercial  needs  of  the  United 
States  in  both  domestic  and  foreign  trade.     One  of  the  principal 


^r  f^ 


92 


FABM-MACHINERT  TBADE  ASSOCIATIONS. 


ACTIVITIES  WITH  RESPECT  TO   LEGISLATION. 


9S 


objects  of  the  Cliamber  of  Commerce  is  to  be  watchful  of  legislation 
affecting  the  business  interests  of  the  country. 

In  referring  to  membership  in  the  Chamber  of  Commerce  of  the 
United  States,  the  executive  committee  of  the  National  Implement 
&  Vehicle  Association  reported  as  follows: 

Our  membership  in,  and  affiliation  with  many  of  the  more 
important  commercial  organizations  of  the  country,  puts  us,  as 
it  were,  in  the  very  center  of  things,  enabling  us  to  bulletin  all 
important  information  quickly.  The  Chamber  of  Commerce 
of  the  United  States,  i*ecently  formed  to  unite  as  far  as  possible 
business  organizations  in  or^er  that  the  wishes  of  the  majority 
might  at  any  time  be  reduced  to  concrete  form  for  the  benefit 
of  the  President,  Congress,  or  any  other  department  of  the 
Government,  when  questions  of  domestic  or  foreign  interest 
arise — we  are  membei*s  of,  and  cooperating  with  this  organiza- 
tion we  expect  it  will  develop  in  time  to  be  a  most  valuable  aid 
to  our  work. 

In  a  pamphlet  issued  by  the  National  Implement  &  Vehicle  Asso- 
ciation during  1911,  the  scope  of  the  duties  of  its  committees  on 
national  and  State  legislation  was  explained  as  follows: 

Our  committee  on  National  legislation,  composed  of  live  man- 
ufacturers, act  as  an  advisory  body  to  direct  the  general  office 
as  to  action  which  should  be  taken  to  alarm  our  members  when 
pernicious  or  detrimental  legislation  is  introduced  at  the  na- 
tional capital,  or  to  counsel  their  cooperation  and  support  to 
legislation  of  beneficial  character. 

Our  committee  on  State  legislation  are  watchful  for  the  in- 
terests of  our  members  in  such  legislation  as  relates  to  labor, 
taxation,  transportation,  rights  of  corporations  within  and  with- 
out the  State,  etc. 

The  committee  on  national  legislation  in  its  report  to  members  at 
the  annual  convention  in  October,  1912,  suggested : 

That  every  member  of  this  organization  constitute  himself  a 
committee  of  one  to  give  strict  attention  to  the  next  session  of 
Congress  calling  the  attention  of  your  next  committee  on  Na- 
tional legislation  to  any  bills  you  deem  of  interest  to  manufac- 
turers in  our  lines,  expressing  at  the  same  time  your  views  to 
assist  the  committee  in  determining  its  course.  This  suggestion 
is  not  made  to  relieve  the  committee  of  its  duties,  but  to  bring 
about  proper  interest  in  important  legislation  which  heretofore 
has  had  too  little  attention  from  the  average  business  man  until 
too  late. 
The  duties  of  these  committees  and  various  recommendations  re- 
garding their  methods  of  work  are  also  referred  to  elsewhere  in  the 

i-eport. 

At  the  annual  meeting  of  the  National  Implement  &  Vehicle  Asso- 
ciation in  October,  1913,  the  attorneys  of  the  association  reported 
that  the  multitude  of  different  laws  affecting  corporations  in  the  dif- 


il    I  • 


ferent  States  was  a  serious  burden  upon  business  enterprise;  that 
there  was  an  opportunity  for  the  association  to  do  a  great  amount  of 
effective  work;  and  that  although  there  were  organizations  which 
could  furnish  copies  of  bills  embodying  legislation  affecting  business, 
it  was  nevertheless  necessary  for  the  interested  parties  to  protect 
their  rights.  In  this  connection,  they  suggested  that  an  association 
might  be  organized  among  the  secretaries  or  managers  of  several 
large  associations  of  manufacturers  and  dealers  to  provide  some 
method  of  investigating  and  correcting  such  proposed  legislation. 
The  report  of  the  committee  on  State  legislation  also  indicated  the 
difficulties  of  handling  the  situation  in  a  practical  way,  involving  the 
necessity  of  analyzing  all  bills  presented  and  of  securing  the  cooper- 
ation of  those  interested  to  appear  either  by  committee  or  otherwise 
before  the  various  legislative  committees.  They  asserted  that  no  one 
organization  could  alone  furnish  service  of  this  sort  unless  it  was 
organized  for  that  express  purpose,  and,  in  this  connection,  suggested 
that,  as  the  desired  information  could  be  procured  through  reliable 
channels,  a  special  committee  composed  of  representatives  from 
various  commercial  organizations  through  the  country  might  be  or- 
ganized to  direct  all  activities  regarding  such  legislation.  The  com- 
mittee suggested  that  a  plan  of  cooperation  with  other  organizations 
might  be  inaugurated  to  start  a  movement  among  the  business  inter- 
ests of  the  country  either  for  a  campaign  of  education  as  to  needed 
legislation  or  for  promoting  efforts  to  modify  or  repeal  detrimental 
legislation. 

Section  2.  Taxation  of  corporations. 

State  taxation  of  foreign  corporations. — Most  of  the  members 
of  the  National  Implement  &  Vehicle  Association  are  organized  as 
corporations  under  the  laws  of  some  State.  As  their  products  are 
sold  in  many  different  States,  the  payment  of  franchise  fees  and 
other  taxes  imposed  on  foreign  corporations  by  laws  of  the  different 
States  is  quite  an  expense.  Various  plans  of  relief  have  been  con- 
sidered. To  avoid  the  liabilities  under  such  laws,  members  of  the 
association  are  advised  to  conduct  their  business  in  such  a  manner 
that  it  will  be  interstate  in  character.  To  accomplish  this,  consider- 
able attention  has  been  devoted  to  an  effort  to  devise  satisfactory 
forms  of  agency  contracts  between  manufacturers  and  dealers.  Fur- 
thermore, the  association  has  for  years  advocated  the  passage  of  a 
national  incorporation  law,  and  until  such  a  law  can  be  passed  the 
manufacturers  favor  uniform  State  laws  governing  corporations. 
Many  of  the  questions  submitted  to  the  attorneys  of  the  association 
relate  to  methods  of  conducting  selling  operations  in  order  to  avoid 
payments  required  by  the  corporation  tax  laws  of  various  States. 


<^ 


94 


FABM-MACHINEBY  TEADE  ASSOCIATIONai 


ACTIVITIES  WITH  RESPECT  TO   LEGISLATION. 


95 


I 


This  matter  of  State  taxation  was  one  of  the  most  important 
problems  confronting  the  implement  and  vehicle  manufacturers  at 
the  time  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers  was  organized,  in  1894.  Many  of  the  mem- 
bers, organized  as  corporations,  owned  warehouses  in  other  States, 
to  which  shipments  were  made  for  reshipment.  To  determine 
whether  such  companies  were  engaged  in  interstate  commerce  in 
a  sense  to  render  them  exempt  from  the  payment  of  a  franchise 
fee,  it  was  decided  to  test  the  law  in  the  State  of  Michigan  by  bring- 
ing a  friendly  suit  in  the  name  of  a  manufacturing  company,  incor- 
porated in  Ohio,  against  a  Michigan  dealer.  Arrangements  were 
made  with  both  parties  to  the  suit,  the  expenses,  including  attorneys' 
fees  for  both  sides,  being  paid  by  the  association.  It  was  felt  that 
a  decision  by  the  Supreme  Court  of  the  United  States  favorable  to 
the  association  would  establish  a  precedent  of  great  benefit. 

The  United  States  Circuit  Court  for  the  Eastern  District  of 
Michigan  decided  in  favor  of  the  manufacturing  company  on  the 
ground  that  the  statute  of  the  State  of  Michigan  was  unconstitu- 
tional as  an  attempt  to  regulate  interstate  trade.  On  appeal  to  the 
Supreme  Court  of  the  United  States  the  judgment  of  the  circuit 
court  was  affirmed,  but  the  higher  court  did  not  find  it  necessary  to 
pass  upon  the  constitutional  question,  as  the  contract  upon  which 
the  suit  was  brought  had  been  consummated  or  made  in  the  State  of 
Ohio,  and,  according  to  the  terms  of  the  Michigan  law,  the  contract 
would  have  to  be  made  in  Michigan  for  the  law  of  that  State  to 
apply.     (Holder  v,  AultmaU;  169  U.  S.,  81.) 

While  this  decision  did  not  clearly  define  interstate  trade,  it  indi- 
cated one  way  in  which  the  foreign  corporation  tax  laws  of  the 
States  might  be  avoided.  It  was  decided  to  put  the  decision  in  con- 
cise form,  and  to  send  it  to  all  members  of  the  association,  accom- 
panied by  a  letter  advising  them  not  to  pay  a  franchise  tax  in  States 
where  their  business  was  not  located.  In  case  of  suit,  they  were  to 
refer  the  matter  to  the  secretary  of  the  association  that  a  test  suit 
might  be  brought.  The  association  proposed  "to  hold  harmless" 
any  member  engaged  in  interstate  commerce,  who  might  be  sued  for 
refusing  to  comply  with  statutes  affecting  foreign  corporations  which 
were  deemed  to  be  unconstitutional. 

In  1906  the  attorneys  of  the  association  were  directed  to  institute 
two  other  suits,  at  the  expense  of  the  association,  to  test  the  foreign 
corporation  laws  of  Texas  and  Kansas,  respectively. 

As  in  the  Michigan  case,  the  object  of  these  suits  was  to  secure  an 
opinion  from  the  Supreme  Court  of  the  United  States  as  to  whether 
companies,  such  as  those  in  whose  names  the  suits  were  brought,  were 
engaged  in  interstate  trade  in  a  sense  that  would  bring  them  under 
the  commerce  clause  of  the  United  States  Constitution  in  such  a  way 


« I* 


m 


;r. 


#     I     • 


as  to  free  them  from  the  operation  of  State  corporation  franchise 
tax  laws.  In  the  Texas  case,  however,  it  was  not  necessary  for  the 
court  to  pass  upon  this  point,  since  the  allegation  of  the  company 
that  it  was  engaged  in  interstate  business  was  not  denied  by  the 
State.  The  court  refused,  however,  to  aid  the  company  in  recovering 
taxes  that  had  been  paid,  as  the  money  had  been  paid  voluntarily  an  i 
not  under  compulsion  of  law.  (Gaar,  Scott  &  Co.  v.  Shannon,  223 
U.  S.,  468.) 

In  the  Kansas  case  the  Supreme  Court  of  that  State  decided  that 
the  manufacturing  company,  in  whose  name  the  suit  was  brought, 
could  not  maintain  an  action  in  the  State  courts  unless  it  complied 
with  the  foreign  corporation  laws  of  the  State,  even  though  the 
orders  taken  by  a  traveling  salesman  were  sent  to  Illinois  for  ap- 
proval and  shipment.  On  appeal  by  the  company — there  being  no 
appearance  for  the  defendant  in  error — the  Supreme  Court  of  the 
United  States  reversed  this  judgment  without  rendering  a  written 
opinion.    (Wilson-Moline  Buggy  Co.  v.  Hawkins,  223  U.  S.,  713.) 

Early  in  1911  the  executive  committee  of  the  National  Implement 
&  Vehicle  Association  instructed  the  attorneys  of  the  association  to 
commence  suits  to  test  the  right  of  the  State  and  county  taxing 
bodies  in  Arkansas  in  seeking  to  tax  notes  and  credits  arising  out  of 
the  sale  of  goods.  It  was  held  by  the  association  that,  as  the  trans- 
action was  purely  one  of  interstate  commerce,  to  tax  notes  and 
credits  taken  in  the  State  for  goods  manufactured  outside  the  State 
was  to  tax  property  outside  the  State. 

In  referring  to  the  activities  of  the  National  Implement  &  Vehicle 
Association  in  bringing  these  suits,  the  committee  on  attorneys  and 
litigation  at  the  annual  meeting  in  1912  made  the  following  state- 
ment: 

No  one  company  can  afford  to  appeal  these  cases  and  take 
them  to  the  Supreme  Court.  It  would  be  much  less  expensive  to 
pay  an  unjust  tax,  or  an  unjust  tax  assessment,  rather  than  go  to 
that  expense  and  annoyance  and  trouble.  The  association  has 
taken  this  work  from  the  manufacturers  in  many  cases  in  the 
past  to  the  great  benefit  of  the  membership. 

A  decision  of  the  Supreme  Court  of  South  Dakota  in  a  suit^  to 
which  none  of  the  members  of  the  National  Implement  &  Vehicle 
Association  was  a  party  was  considered  to  be  so  important  to  the 
members  of  that  association  that  its  attorneys  were  instructed  to 
procure  the  appeal  of  the  case  to  the  Supreme  Court  of  the  United 
States.  The  expense  of  this  appeal  was  to  be  borne  by  the  association 
assisted  by  the  National  Association  of  Credit  Men  and  the  National 
Association  of  Manufacturers. 

A  resolution  adopted  at  the  convention  in  1912  advised  the  mem- 
bers to  give  greater  heed  to  the  recommendations  of  the  attorneys  as 

1  Sioux  Remedy  Co.  v.  Cope,  133  N.  W.  683  (1911). 


96 


FABM-MACHINERY  TBADE  ASSOCIATIONa 


ACTIVITIES  WITH  RESPECT  TO  LEGISLATION. 


97 


to  noncompliance  with  State  laws  relative  to  franchise  taxes  and 
license  fees,  where  a  strictly  interstate  business  was  being  conducted 
in  a  foreign  State. 

The  members  of  the  implement  and  vehicle  manufactuers'  associa- 
tion have  repeatedly  adopted  resolutions  favoring  a  national  incor- 
poration law  as  a  means  of  relief  from  the  liabilities  imposed  by  State 
laws.  At  the  annual  meeting  of  the  association  in  October,  1912,  the 
attorneys  of  the  association  made  a  similar  recommendation.  They 
advised  that  a  national  incorporation  law  "  should  be  specific  in  de- 
fining the  powers  of  the  corporation  and  prescribing  its  limitations 
and  be  so  framed  that  when  a  corporation  is  incorporated  thereunder 
its  managers  may  know  definitely  and  specifically  what  their  powers 
and  rights  are ;  what  limitations  are  placed  upon  them  and  that  out- 
side of  such  limitations  imposed  by  the  act,  that  they  shall  be  as 
free  as  individuals  to  transact  their  business  and  sell  their  wares 
throughout  the  United  States  and  wherever  the  American  flag  flies, 
unhampered  and  unencumbered  by  State  lines  and  State  statutes." 

Federal  corporation  tax. — Although  the  National  Implement  & 
Vehicle  Association  favors  a  Federal  incorporation  law  it  was  op- 
posed to  the  Federal  law  of  1909  taxing  corporations.  In  the  early 
part  of  1910  the  attorneys  for  the  implement  association  had  advised 
that  no  reports  be  made  to  the  Government  under  the  corporation 
tax  law,  unless  accompanied  by  a  letter  protesting  the  constitution- 
ality of  the  act.  Members  of  the  association  were  urged  to  confer 
with  the  secretary  of  the  association  before  making  any  report.  In  a 
letter  to  members  of  the  association  dated  in  January,  1910,  the  chair- 
man of  the  executive  committee  said,  in  part : 

We  are  aiding  indirectly  those  who  are  expecting  to  contest 
the  constitutionality  of  the  act,  and  directly  those  favoring  an 
amendment  or  repeal  of  the  act,  but  *  *  *  we  regretfully 
believe  that  incorporated  companies  must  face  the  issue  and 
prepare  to  make  their  imports. 

Members  were  advised  that  the  attorneys  of  the  association  believed 
the  law  to  be  unconstitutional.  Forms  of  protest  to  be  filed  by  mem- 
bers against  the  collection  of  the  tax,  and  also  against  the  publicity 
feature  of  the  act,  were  inclosed  in  this  letter.  It  was  reported  that 
steps  had  been  taken  to  secure  an  amendment  or  repeal  of  the  pub- 
licity clause.  A  circular  letter  dated  February  4, 1910,  and  signed  by 
the  chairman  of  the  executive  committee,  read,  in  part,  as  follows : 

Your  executive  committee  has  been  active  individually  and 
by  cooperation  with  other  associations  and  interests  in  the  effort 
to  induce  Congress  to  repeal  the  publicity  clause  in  the  corpora- 
tion tax  law.  The  repeal  *  *  ♦  would  require  an  amend- 
ment of  the  tariff  act  of  August  5,  1909.  Such  an  amendment 
brought  in  to  the  House  would  be  open  to  amendment  for  every 


^> 


< 


-^ 


s 


item  in  the  tariff  law,  both  in  the  House  and  in  the  Senate, 
and  would  result  in  opening  up  the  tariff  question  and  you  can 
realize  as  well  as  I  do  what  a  paralysis  this  would  cause  to  busi- 
ness generally.  It  is  very  much  to  be  regretted  that  the  offensive- 
ness  of  this  particular  clause  was  not  as  fully  realized  when  the 
bill  was  imder  discussion  as  at  this  time. 

On  June  9, 1910,  the  secretary  of  the  National  Association  of  Agri- 
cultural Implement  &  Vehicle  Manufacturers  issued  a  circular  letter 
to  members  advising  them  that  the  various  suits  brought  to  test  the 
constitutionality  of  the  law  had  been  reassigned  for  hearing  at  the 
October  term  of  the  Supreme  Court,  and  members  were  urged  "to 
immediately  request  your  Representatives  in  Congress  to  have  the 
law  so  amended  that  payment  of  the  tax  will  not  be  required  until 
the  Supreme  Court  renders  its  decision.  An  amendment  such  as  we 
suggest  would  avoid  the  necessity  of  payment  of  the  tax  at  this  time 
and  a  refund  of  the  amount  in  case  the  law  is  declared  unconstitu- 
tional." 

In  July,  1911,  the  secretary  issued  a  bulletin  quoting  a  bulletin  of 
the  Wisconsin  Manufacturers'  Association  relative  to  the  payment  of 
the  penalty  for  failure  to  comply  with  the  Federal  corporation-tax 
law,  advising  members  to  pay  under  protest,  and  later  in  the  month 
members  were  advised  of  the  text  of  a  bill  introduced  in  Congress  to 
provide  for  a  refund  or  abatement  of  the  tax  under  certain  conditions. 
Later,  the  secretary  stated : 

We  have  taken  the  matter  up  with  the  American  Association 
of  Public  Accountants  with  whom  we  have  been  working  since 
the  bill  was  introduced  and  will  be  prepared  to  do  our  part  at 
the  proper  time.  *  *  *  it  is  probable  that  later  we  will  want 
the  cooperation  of  every  member  in  stirring  up  their  Congress- 
men, at  which  time  you  will  be  duly  advised. 

This  was  followed  in  a  few  days  by  another  bulletin  urging  mem- 
bers to  write  their  Congressmen  at  once  along  lines  suggested  in  the 
bulletin,  commending  another  bill  introduced  on  the  same  subject  on 
December  5.  Members  were  requested  to  notify  the  secretary  of  the 
association  when  they  wrote  their  Congressmen,  and  a  little  later 
the  secretary  notified  members  of  the  replies  that  he  had  received 
from  members  who  had  written  their  Congressmen.  He  also  com- 
mended a  suggestion  that  large  results  might  be  obtained  if  the 
members  could  arouse  interest  on  this  subject  among  the  local  busi- 
ness associations  with  which  they  were  connected. 

Section  3.  Legislation  relating  to  the  tariff  and  foreign  trade. 

The  importance  of  tariff  legislation  to  manufacturers  in  the  imple- 
ment industry  is  shown  by  the  fact  that  the  organization  of  the 
National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 

68248*'— 15 1 


98 


l-ABM-MACHINEKY   TRADE  ASSOCIATIONS. 


ACTIVITIES  WITH  RESPECT  TO   LEGISLATION. 


99 


facturers,  in  April,  1894,  was  due  very  largely  to  the  tariff  legisla- 
tion of  that  year.  Earlier  in  the  year,  in  February,  representatives 
of  a  number  of  concerns  engaged  in  the  manufacture  of  various  kinds 
of  farm  machinery  met  at  Chicago  and  appointed  a  committee  to 
protest  against  the  free  admission  of  agricultural  implements  from 
other  countries,  except  under  reciprocal  arrangements.  It  was 
claimed  that  the  work  of  this  committee  resulted  in  securing  an 
amendment  to  the  Wilson  tariff  bill,  providing  that  the  then  existing 
duties  be  retained  on  specified  articles  from  countries  that  imposed 
an  import  duty  on  like  shipments  from  the  United  States.  The 
success  of  this  committee  afforded  a  concrete  example  of  the  value  of 
collective  action  among  implement  manufacturers  in  different  lines, 
and  helped  to  bring  about  the  formation  of  the  National  Association 
of  Agricultural  Implement  &  Vehicle  Manufacturers. 

After  the  association  was  organized,  resolutions  intended  to  pro- 
mote foreign  trade  were  adopted  from  time  to  time,  such  as  urging 
upon  Congress  the  importance  of  maintaining  the  consular  system 
upon  a  high  standard  of  efficiency  and  favoring  the  establishment  of 
a  strong  American  merchant  marine.  In  1896  the  association  selected 
a  representative  to  accompany  a  party  of  members  of  the  National 
Association  of  Manufacturers  to  South  America  to  investigate  trade 
conditions.  Subsequently  the  association  devoted  considerable  time 
to  discussing  ways  and  means  of  extending  the  trade  of  its  members 
in  South  American  countries.  At  the  convention  held  in  October, 
1898,  resolutions  were  adopted,  recommending  that  a  special  com- 
mittee be  sent  to  confer  with  officials  of  the  Department  of  State 
regarding  the  interests  of  the  members  of  the  association  in  the  so- 
called  Kasson  treaties  of  reciprocity  that  were  being  negotiated. 

In  November,  1905,  a  committee  was  appointed  to  consider  the 
interests  of  the  association  as  to  the  tariff  and  reciprocity,  and,  in 
that  connection,  to  appear  before  any  committee  of  Congress  at  any 
time  in  its  discretion.  The  report  of  this  committee,  made  in  August, 
1906,  recommended  a  very  considerable  reduction  in  the  duties  on 
the  materials  used  in  the  manufacture  of  implements,  particularly 
iron  and  steel.  An  extensive  discussion  among  the  members  of  the 
executive  committee  followed  the  reading  of  this  report,  and  the 
question  was  raised,  assuming  the  accuracy  of  the  facts  reported, 
whether  it  would  be  best  for  the  association  to  undertake  an  agitation 
for  a  revision  of  the  tariff,  with  its  possible  disadvantageous  conse- 
quences (See  p.  59.)  The  committee  was  directed  to  continue  its 
investigations,  and,  in  December,  1906,  a  standing  committee  on  the 
tariff  was  created.  In  November,  1908,  this  committee  was  author- 
ized and  directed  to  attend  the  hearings  of  the  Ways  and  Means  Com- 
mittee on  matters  affecting  implements,  with  the  idea  of  securing  a 
reasonable  tariff  on  implements  and  vehicles  and  a  material  reduc- 
tion on  certain  raw  materials  which  the  implement  manufacturers 


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W  -  '^ 

} 


1  -ll^ 


believed  to  be  overprotected.  The  executive  committee  also  ordered 
the  report  of  the  tariff  committee,  made  at  the  convention  a  short 
time  before,  to  be  published,  providing  it  had  been  revised  in  ac- 
cordance with  the  wishes  of  the  association. 

The  association  favored  the  creation  of  a  Federal  tariff  board,  and 
in  1910  elected  one  of  its  members  to  a  place  on  the  National  Tariff 
Commission  Association.  Members  of  the  National  Association  of 
Agricultural  Implement  &  Vehicle  Manufacturers  were  urged  to 
write  their  Senators  and  Congressmen  at  once,  recommending  the 
passage  of  a  bill  making  an  appropriation  for  the  Tariff  Board. 

In  the  latter  part  of  1910  the  tariff  committee  reported  to  the 
executive  committee  that  tariff  matters  were  in  such  shape  as  to 
need  no  further  attention  from  the  association,  "it  being  under- 
stood that  there  would  be  no  further  agitation  on  the  part  of  our 
members  for  the  present."  It  was  announced  that  the  National 
Tariff  Commission  Association  had  signified  its  approval  of  the 
Tariff  Board. 

One  of  the  first  matters  to  engage  the  attention  of  the  executive 
committee  of  the  National  Implement  &  Vehicle  Association  in 
January,  1911,  was  reciprocity  with  Canada.  The  committee 
adopted  a  resolution  favoring  a  decided  reduction  in  the  tariff  on 
agricultural  implements,  vehicles,  and  allied  lines  imported  into  the 
United  States  from  Canada,  provided  the  Canadian  Government 
would  reduce  its  tariff  to  the  same  basis  on  like  lines  imported  from 
the  United  States.  The  secretary  of  the  association  and  the  chair- 
man of  the  executive  conunittee  were  instructed  to  prepare  a  resolu- 
tion on  the  subject  and  embody  it  in  a  letter  to  the  President  of  the 
United  States,  and  the  secretary  was  directed  to  inform  members 
and  to  urge  them  to  write  their  Congressmen  that  proper  attention 
be  given  the  subject. 

During  February,  1911,  the  secretary  visited  Washington  in  con- 
nection with  the  Canadian  reciprocity  agreement  and  appeared 
before  the  Committee  on  Ways  and  Means  to  communicate  the  ap- 
proval of  the  association.  He  reported  his  impressions  of  the  situa- 
tion in  a  bulletin  dated  February  8.  In  it  he  also  stated  that,  as  the 
president  of  the  association  expected  to  be  in  Washington  when  the 
bill  reached  the  United  States  Senate,  the  association  would  not 
only  be  ably  represented,  but  also  be  kept  well  informed  concerning 
the  situation  and  be  in  position  to  respond  to  any  call  which  might 
be  made  for  assistance.  On  February  20,  members  were  again 
recommended  to  write  their  Senators  at  once,  urging  them  to  sup- 
port the  confirmation  of  the  Canadian  reciprocity  agreement.  The 
bulletin  added: 

We  appreciate  the  assistance  you  have  already  given,  but 
another  strong  letter  from  you  to  your  Senators  may  stir  them 
to  action,  so  please  give  it  prompt  attention  and  send  us  copy. 


->■ 


100 


FAKM-MACHINEKY   TBADE  ASSOCIATIONS. 


ACTIVITIES  WITH  RESPECT   TO   LEGISLATION. 


101 


l> 


%t 


^ 


Before  the  Senate  had  ratified  the  reciprocity  agreement,  another 
bulletin  to  the  same  effect  was  sent  out.  This  letter,  dated  May  2, 
also  warned  members  that  the  issue  might  be  befogged  by  a  bill  ^^ 
that  had  been  introduced  to  place  agricultural  implements  and  farm 
wagons  on  the  free  list— a  bill  which  the  letter  asserted  to  be  purely 
a  tariff  matter  having  no  connection  with  the  reciprocity  agreement. 
The  work  of  the  tariff  committee  of  the  association  in  1911  was  sum- 
marized in  a  report  to  the  convention  held  at  Chicago  in  October,  1911. 
In  this  report  it  was  stated  that  the  committee  had  deemed  it  advisable 
not  to  agitate  the  question  of  tariff  revision  during  the  preceding 
year.  It  was  asserted  that  the  failure  of  Canada  to  ratify  the  treaty 
of  reciprocity  that  had  been  negotiated  left  the  field  open  for  sug- 
gestions of  such  tariff  changes  as  would  be  of  benefit  to  the  members 
of  the  association. 

In  March,  1912,  the  secretary  advised  members  that  special  ar- 
rangements had  been  made  at  Washington  to  procure  quickly  and, 
without  the  usual  delay  in  making  requests  of  the  various  depart- 
ments, the  latest  and  most  complete  information  concerning  foreign 
trade  in  which  the  members  of  the  association  were  interested. 

From  time  to  time  the  secretary  of  the  National  Implement  & 
Vehicle  Association  has  issued  general  bulletins  advising  members 
of  changes  in  the  tariff  laws  of  foreign  countries  and  of  news  of  the 
export  trade  as  shown  in  the  consular  reports  of  the  Government. 

In  the  early  part  of  1912  the  secretary  wrote  members  for  informa- 
tion regarding  their  export  trade  to  Kussia  to  ascertain  the  effect  of 
the  abrogation  of  the  treaty  with  Russia  on  the  American  implement 
trade  stating: 

It  is  essential  that  business  men  give  such  matters  as  this  and 
others  not  yet  separated  from  political  influence,  more  attention 
than  they  have  m  the  past  if  we  are  to  avoid  the  lo^  of  our 
choicest  opportunities  through  their  political  aspect  or  influence 
being  made  paramoimt. 
At  the  annual  convention  held  in  October,  1912,  the  committee  on 
tariff  reported  that  it  had  been  deemed  desirable  to  look  into  but  one        ^ 
question  of  great  importance,  namely,  the  Russian  situation,  as  re-  ' 

gards  the  possibility  of  a  prohibitory  tariff  being  placed  on  Ameri- 
can agricultural  machinery  as  the  result  of  differences  growing  out 
of  the  abrogation  of  the  commercial  treaty.  A  committee  was  ap- 
pointed to  continue  work  at  Washington  necessai-y  to  bring  about  a 
friendly  settlement  of  existing  difficulties  between  the  United  States  ^ 
and  Russia,  and  it  was  recommended  "that  they  should  lose  abso- 
lutely no  time  as  the  danger  is  certainly  grave."  A  resolution  was 
adopted  urging  the  necessity  of  immediate  action  in  the  negotiation 
of  a  new  treaty  with  Russia  to  avoid  "  terrific  loss,"  and  the  secretary 
was  directed  to  forward  a  copy  of  this  resolution  to  all  interested 


4 


a 


1  * 


commercial  bodies  of  this  country  and  to  asK  their  cooperation  and 

support. 

The  report  of  the  tariff  committee  was  chiefly  devoted  to  the 
Russian  situation.    It  said,  in  part,  however: 

We  did  not  deem  it  advisable  to  agitate  nor  to  undertake  to 
suggest  in  the  matter  of  the  revision  of  our  tariff  on  steel,  feeling 
that  it  is  not  within  our  power  at  this  time,  owing  to  the  politi- 
cal situation  and  the  further  fact  that  there  seems  to  exist  such 
large  differences  of  opinion  on  that  question  among  our  own 
members,  and  the  further  fact  that  the  Government  will  un- 
doubtedly succeed  in  creating  a  tariff  board,  and  the  fact  that 
if  such  a  board  is  created  it  would  give  our  association  a  direct 
body  to  work  with,  if  in  your  judgment  it  was  advisable.  For 
the  above  reason  we  pass  over  that  question. 

The  convention  adopted  a  resolution  advocating  "  that  all  legisla- 
tion for  the  revision  of  protective  tariff  rates  should  be  based  upon 
actual  changes  in  economic  differences  between  American  and  foreign 
countries  scientifically  determined  by  a  nonpartisan  tariff  commis- 
sion." Resolutions  were  also  adopted  approving  the  reorganization 
of  the  consular  and  diplomatic  service,  the  maintenance  of  the  service 
on  a  uniformly  high  standard  of  efficiency,  and  the  adoption  of  meas- 
ures for  the  creation  of  an  American  merchant  marine  and  favoring 
a  bill  making  the  owners  of  vessels  liable  for  loss  or  damage  of 
cargoes,  etc. 

At  the  convention  in  October,  1913,  the  committee  on  foreign  com- 
merce and  tariff  reported  that  a  satisfactory  settlement  of  the  Russian 
tariff  situation  might  be  expected,  but  that  implements  manufactured 
in  other  foreign  countries  were  gaining  a  strong  foothold  in  Russia. 
The  report  of  the  committee  also  called  attention  to  the  prospect  for 
trade  for  American  implement  manufacturers  in  various  foreign 
countries. 

To  assist  members  of  the  National  Implement  &  Vehicle  Associa- 
tion in  extending  their  trade  in  foreign  markets,  a  separate  depart- 
ment, composed  of  the  foreign-trade  managers  of  various  members  of 
the  association,  was  organized  in  April,  1914.  The  president  of  this 
department,  at  the  annual  convention  of  the  association  held  the 
following  October,  stated  that — 

Its  object  is  to  collect  and  distribute  among  our  members 
general  information  on  matters  of  export  that  will  enable  them 
to  seek  an  increased  trade  among  our  foreign  friends  at  the  least 
possible  expense. 

At  the  time  this  department  was  organized  the  following  resolution 

was  adopted: 

Resolved,  That  the  members  of  this  department  cooperate  in 
furnishing  information  relative  to  the  foreign  trade,  to  any  rea- 
sonable extent,  on  request,  and  that  copies  of  all  inquiries  and 
answers  be  filed  with  the  secretary. 


102 


FARM-MACHINERY  TRADE   ASSOCIATIONS 


ACTIVITIES  WITH  RESPECT  TO  LEGISLATION. 


103 


Topics  considered  at  the  first  meeting  of  the  foreign-crade  man- 
agers' department  included  the  following:  Quoting  prices  to  the 
foreign  trade,  methods  of  handling  Russian  trade,  foreign  terms  and 
credits,  preparation  of  foreign-trade  catalogues,  and  hindrances  to 
agricultural  development  in  the  Argentine.  In  connection  with  the 
work  of  this  department,  it  has  been  suggested  that  the  association 
establish  bureaus  in  countries  where  members  wish  to  build  up  their 
trade,  and  also  a  bureau  and  showroom  in  New  York  City. 

Section!.  Patent  laws. 

A  revision  of  the  patent  laws  of  the  United  States  was  advocated 
at  the  annual  meeting  of  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers  in  1897,  and  an  improvement  of 
the  patent  system  was  urged  at  the  convention  held  in  1898.  A 
standing  committee  on  patents  appears  to  have  been  created  for  the 
first  time  in  November,  1898. 

In  1907  the  report  of  the  committee  on  patents  stated  that,  although 
it  might  be  thought  too  great  a  task  for  the  association  to  suggest  modi- 
fications of  the  patent  laws,  it  might  be  wise  "  to  sow  seeds  "  in  order 
that  the  manufacturers  might  at  some  time  reap  the  benefit.  Accord- 
ingly the  committee  made  certain  suggestions  which  were  later  in- 
dorsed by  the  association.  It  opposed  the  extension  of  patents  and  the 
existence  of  patent-holding  companies,  and  advocated  that  foreigners 
be  subjected  to  the  same  requirements  that  foreign  nations  impose 
upon  American  inventors.  In  the  administration  of  the  patent  law, 
it  was  recommended  that  greater  care  be  observed  in  the  issuance  of 
patents  and  that  the  standard,  as  to  the  sufficiency  of  invention  to 
warrant  the  issue  of  a  patent,  be  raised.  Furthermore,  it  was  rec- 
ommended that  a  competent  and  adequate  force  of  Patent  Office 
employees  be  provided  for;  that  abandoned  applications  be  cited 
against  new  applications  and  be  open  to  public  inspection  after  a  rea- 
sonable time ;  and  that  an  improved  and  more  appropriate  system  of 
classification  and  indexing  of  patents  be  adopted.  In  January,  1908, 
the  chairman  of  the  committee  on  patents  was  authorized  to  appear 
before  the  House  Committee  on  Patents  to  ask  for  legislation  along 
the  lines  indorsed  in  those  recommendations. 

In  September,  1911,  the  secretary  of  the  National  Implement  & 
Vehicle  Association  directed  the  attention  of  the  members  to  three 
bills  to  modify  the  existing  patent  system  which  were  considered 
inimical  to  patentees.  One  of  these  bills  provided  for  the  forfeiture 
of  patent  rights  under  certain  conditions  and  the  other  two  aimed 
at  the  adoption  of  a  compulsory  system  for  the  manufacture  of  pat- 
ented articles  under  license.  It  was  urged  that  if  these  latter  bills 
should  become  law  competitors  could  compel  the  owner  of  a  patent 
to  grant  a  license  or  shop-manufacturing  privileges  and  thus  destroy 


<f 


Iff 


m 


■m 


^ 


the  incentive  to  invention  through  the  destruction  of  the  patent 
monopoly.    It  was  said : 

d^  These  bills  seem  not  only  unconstitutional,  but  ridiculous,  tor 

they  destroy  the  very  foundation  upon  which  many  great  manu- 
facturing institutions  are  established  *  *  *.  We  recom- 
mend that  you  immediately  register  vigorous  protest  with  your 
Representative  and  Senators  against  these  bills  .     We 

should  not  wait  until  the  next  session  of  Congress  to  make 
known  our  objections,  but  should  stamp  out  at  once  this  move- 
^  ment  for  compulsory  patent  license. 

At  the  convention  held  in  October,  1911,  the  patent  committee 

condemned  the  movement  for  compulsory  patent  licenses.     Specific 

^    objections  to  these  bills  were  pointed  out,  and  members  were  urged 

to  take  a  positive  stand  against  their  enactment  and  make  their 

opposition  known  to  Representatives  and  Senators.     The  committee 

%         reported  that  for  several  years  it  had  supported  the  movement  to 

secure  the  establishment  of  a  court  of  patent  appeals,  and  that  the 

need  for  such  a  court  had  become  apparent  by  reason  of  conflicting 

decisions  rendered  by  the  various  courts  of  appeal.    A  separate 

court  of  patent  appeals  was  urged,  and  members  were  requested  to 

^  make  their  wishes  known  to  the  President  of  the  United  States  and 

%         their  Congressmen,  when  called  upon  to  do  so,  for  the  enactment  of 

a  bill  pending  in  Congress  providing  therefor. 

A  resolution  was  adopted  expressing  the  opposition  of  the  asso-  < 
ciation  to  giving  authority  to  the  Commissioner  of  Patents  to  grant 
licenses  to  other  than  the  patentee  to  manufacture  the  patented 
article  as  proposed  by  a  recent  bill  introduced  in  Congress.    The 
•  opposition  of  the  association  was  also  expressed  to  a  provision  con- 

tained in  a  Senate  bill  forfeiting  a  patent  on  terms  and  conditions 
therein  provided.    The  association  took  the  view  that  the  rights  of 
foreign  patentees  should  be  limited  by  the  same  rules  and  regulations 
,^  by  which  patentees  of  this  country  are  limited  in  the  country  where 

the  original  patent  was  granted. 
A  At  a  meeting  of  the  executive  committee  held  December  23,  1911, 

the  committee  on  patents  was  requested  to  draft  a  bill  requiring  that 
all  laws  or  treaties  passed  relative  to  patents  be  made  on  a  reciprocal 
basis,  and  that  the  committee  give  special  attention  to  pending  legis- 
lation relative  to  patents  and  ask  the  cooperation  of  the  conunittee  on 
National  legislation  if  necessary. 
m  At  the  convention  in  1912  the  committee  on  patents  reported  that 

its  work  during  the  preceding  year  had  been  principally  along  the 
line  of  opposing  legislation  to  revise  the  patent  laws.  It  reported 
that  the  compulsory  patent  measure  had  been  so  vigorously  opposed 
by  this  association  and  others  that  it  was  dropped,  but  the  propa- 
ganda was  later  revived.    It  was  asserted  that  the  object  of  foreign 


% 


104 


FABM-MACHINEBY  TRADE  ASSOCIATIONS. 


countries  in  adopting  compulsory  license  measures  was  "to  stifle 
American  inventors,"  and  that  it  seemed  incomprehensible  that  seri- 
ous consideration  should  be  given  to  the  adoption  of  a  system  that 
had  been  "  primarily  devised  abroad  to  throttle  American  progress." 
It  was  stated  that  the  revision  of  our  patent  law  would  have  far- 
reaching  effect  and  was  a  matter  of  too  great  importance  to  be  under- 
taken hastily,  and  that  the  objections  to  the  compulsory  license 
system  were  so  great  that  the  committee  urged  that  there  be  no 
cessation  on  the  part  of  members  in  opposing  such  a  measure.  It 
added  that,  aside  from  this  attempted  revision  of  the  patent  laws, 
the  patent  situation  had  apparently  been  very  satisfactory  so  far  as 
the  members  of  the  National  Implement  &  Vehicle  Association  were 
concerned. 

At  this  convention  the  association  attorneys  notified  members  that 
they  had  been  informed  that  the  patent  committee  of  the  House  of 
Kepresentatives  had  a  bill  before  it  which  declared  that  it  should  not 
be  lawful  to  insert  a  condition  in  a  contract  relating  to  the  sale,  lease, 
or  license  of  any  patented  article  or  process,  the  effect  of  which  would 
be  to  prohibit  or  restrict  the  purchaser,  lessee,  or  licensee  from  using 
any  article  or  class  of  articles,  and  that  it  should  not  be  lawful  to 
insert  in  any  contract  a  condition  requiring  the  purchaser  to  acquire 
from  the  seller  any  article  or  class  of  articles  not  protected  by  the 
•patent.  This  situation  was  pointed  out  for  the  "  serious  considera- 
tion "  of  the  members  of  the  association. 

The  convention  adopted  the  following  resolution: 

Whereas  our  patent  laws  have  afforded  inventors  and  owners 
of  patents  protection. 

Resolved^  That  we  continue  our  efforts  in  opposing  any  revi- 
sion of  the  patent  laws  which  contemplates  a  compulsory  license. 

In  June,  1914,  the  patent  committee  of  the  National  Implement  & 
Vehicle  Association  decided  to  offer  its  services  as  mediator  for  the 
adjustment  of  any  dispute  among  members  of  the  association  in 
regard  to  patents. 

Section  5.  Industrial  indemnity  and  indemnity  insurance. 

So  far  as  shown  by  the  records  of  the  various  associations  of  im- 
plement and  vehicle  manufacturers,  their  activities  in  respect  to  labor 
matters  have  been  devoted  chiefly  to  the  subject  of  employers'  lia- 
bility or  workmen's  indemnity  compensation,  especially  in  respect  to 
State  legislation  placing  risks  upon  the  employers.     (See  pp.  57 

wid  58.) 

One  of  the  first  matters  taken  up  by  the  executive  committee  of  the 
National  Implement  &  Vehicle  Association  after  the  formation  of 
that  organization,  in  January,  1911,  was  industrial  indemnity  legis- 
lation.   The  National  Association  of  Agricultural  Implement  &  Ve- 


<r 


-      U      V 


ACTIVITIES  WITH   RESPECT  TO   LEGISLATION. 


105 


hide  Manufacturers  had  provided  for  a  committee  on  industrial 
indemnity  and  insurance  shortly  before  this  time,  and  a  conference 
had  been  held  at  Columbus,  Ohio,  with  members  of  a  similar  com- 
mittee acting  for  the  National  Association  of  Manufacturers.  In 
March,  1911,  it  was  decided  that  the  National  Implement  &  Vehicle 
Association  should  take  an  active  interest  in  industrial  indemnity 
and  legislation  on  the  subject  pending  in  various  States,  cooperating 
with  other  organizations  working  toward  the  passage  of  fair  and 
equitable  laws.  The  secretary  of  the  association  was  instructed  to 
write  each  member  of  the  committee  on  State  legislation  that  in  part 
his  duties  were  to  immediately  ascertain  from  his  representatives  at 
the  capital  of  his  State  just  what  bills  or  legislation  were  pending 
which  would  be  of  interest  to  him  as  a  manufacturer.  If  inimical 
to  his  interest,  he  was  requested  to  report  the  matter  at  once  to  the 
chairman  of  the  committee  on  State  legislation  in  order  tha  the  asso- 
ciation might  cooperate  with  him  and  with  other  commercial  bodies 
in  the  State  to  secure  the  amending  of  such  bills,  so  that  they  would 
be  fair  and  equitable. 

The  executive  committee  took  immediate  action  on  the  industrial 
indemnity  legislation  then  pending  in  Wisconsin  and  Illinois  by  in- 
structing the  members  of  the  State  legislation  committee  in  those 
States  to  immediately  notify  all  the  association  members  resident 
therein  to  name  representatives  who  could  act  for  them  and  be  sub- 
ject to  call  if  the  chairman  found  it  necessary  to  use  a  delegation. 
The  members  of  the  State  legislation  committee  were  also  notified 
that  the  association  expected  them  to  get  in  touch  with  what  was 
going  on  in  their  State  legislatures  of  special  interest  to  manufac- 
turers and  report  at  once  to  the  chairman  of  the  committee  with  sug- 
gestions of  what  action  should  be  taken.  As  much  of  the  legislation 
then  pending  was  considered  by  the  manufacturers  to  be  drastic  and 
discriminatory,  every  member  of  the  association  was  urged  in  self- 
protection  to  interest  himself  and  send  his  views  to  the  association 
office.    It  was  advised  that — 

It  is  not  always  possible  to  head  off  inimical  laws,  but  by  coop- 
erative organization  it  is  possible  to  modify  them,  and  these  new 
industrial  indemnity  laws  are  of  this  character. 

The  secretary  of  the  association  in  his  report  to  a  meeting  of  the 
executive  committee  in  June,  1911,  stated  that,  if  it  had  not  been  for 
the  cooperation  of  the  association  in  securing  modifications  in  the 
terms  of  some  of  the  industrial  indemnity  laws  that  had  been  passed, 
they  would  have  been  passed  in  a  much  more  drastic  form.  He  said 
that  some  of  the  committee  members  had  sacrificed  largely  of  their 
time  and  money  in  working  for  the  modifications ;  that  in  Wisconsin 
the  bill  had  been  much  improved  by  the  attention  given  and  work 


VL.^^# 


1 


106 


FARM-MACHINEBY  TKADE  ASSOCIATIONS. 


done  by  certain  members  of  the  association  in  that  State,  and  that  in 
Ohio  one  of  the  members  of  the  association  had  not  only  framed 
most  of  the  provisions  of  the  compensation  law  but  had  been  of 
much  service  in  securing  its  passage  through  both  houses  of  the  legis- 
lature. He  reported  that  in  Illinois  the  members  of  the  association 
had  given  a  larger  proportion  of  time  and  attention  to  this  question 
than  was  given  by  any  other  line  of  business. 

An  advance  in  the  rates  of  industrial  indemnity  insurance  com- 
panies led  to  a  suggestion  in  June,  1911,  as  to  the  possibility  of  creat- 
ine some  plan  of  mutual  insurance  among  the  members.  An  effort 
was  made  to  collect  from  the  records  of  members  reliable  statistics 
for  use  in  case  it  should  be  decided  to  organize  a  mutual  industrial 
indemnity  insurance  company.  No  further  steps  seem  to  have  been 
taken  in  this  direction. 

Accident  prevention  and  industrial  indemnity  laws  received  much 
attention  at  the  annual  meeting  of  the  association  in  October,  1911. 
The  report  of  the  committee  on  industrial  indemnity  insurance 
suggested  that  the  members  of  the  association  might  imite  with 
other  manufacturers  in  their  respective  States  to  assist  in  securing 
the  adoption  of  a  fair  and  equitable  law.  The  committee  recom- 
mended that  steps  be  taken  to  reduce  accident  risks  at  the  factories 
of  the  members,  and  also  suggested  the  interchange  of  information 
among  members  as  to  devices  for  safeguarding  dangerous  machinery. 
This  report  also  called  attention  to  the  recommendation  of  the  State 
legislative  committee  advocating  more  complete  organization  among 
manufacturers.  (See  p.  91.)  The  members  of  the  association 
adopted  resolutions  favoring  a  national  employers'  liability  law  and 
expressing  the  sense  of  the  association  that  it  was  far  better  to  pre- 
vent accidents  than  to  obtain  low  settlements  after  their  occurrence. 
In  this  connection,  the  executive  committee  of  the  association  was 
instructed  to  employ  such  methods  as  were  deemed  best  to  educate 
all  members  in  thfe  prevention  of  accidents.  The  committee  en  indus- 
trial indemnity  insurance  was  also  empowered  to  cooperate  with 
committees  of  other  organizations  in  safeguarding  the  interest  of 
members  in  a  reasonably  uniform  way.  In  1912  the  members 
adopted  resolutions  referring  to  employees'  compensation  legislation 
as  a  vital  problem  to  be  solved  rather  than  to  be  resisted,  and  recom- 
mended legislation  of  a  uniform  and  constructive  character  based 
upon  a  plan  of  making  such  compensation  compulsory  on  employers 
and  employees,  the  cost  of  administering  the  law  to  be  borne  by  the 
Government,  the  fund  to  be  contributed  by  employers  and  employees. 

Since  1912  the  activities  of  the  association  in  lespect  to  industrial 
indemnity  legislation  seem  to  have  been  based  upon  this  recommenda- 
tion. Careful  attention  has  also  been  given  to  the  prevention  of 
accidents. 


J 


^  I  # 


iH 


ACTIVITIES   WITH   RESPECT   TO   LEGISLATION. 


107 


Section  6.  Opposition  to  prison  factory  legislation. 

For  some  years  the  various  associations  of  implement  and  vehicle 
manufacturers  and  dealers  have  opposed  State  legislation  providing 
for  the  manufacture  of  binder  twine  and  implements  in  prisons.  The 
dealers  have  attacked  proposed  legislation  on  the  ground  that  it  is 
unjust  discrimination  against  implement  dealers;  that  it  is  unconsti- 
tutional and  unprofitable  for  States  to  engage  in  manufacturing 
enterprises;  that  it  tends  to  discourage  invention,  etc.  They  have 
opposed  such  legislation  because  the  prison  output  has  been  generally 
sold  directly  to  farmers  at  prices  less  than  the  prices  at  which  dealers 
can  sell  goods  made  at  factories  employing  free  labor.  Moreover, 
there  has  been  little  profit  to  dealers  in  handling  the  prison  product 
since  they  have  had  to  pay  about  the  same  price  as  paid  by  the  farmer. 

It  is  claimed  that  the  implement  manufacturers'  and  dealers'  asso- 
ciations have  been  successful  in  efforts  to  prevent  or  delay  the  passage 
of  such  legislation  in  several  States.  In  other  States,  however,  nota- 
bly in  Minnesota,  where  the  manufacturing  operations  have  been 
conducted  apparently  with  a  considerable  degree  of  success,  such 
opposition  seems  to  have  had  little  effect. 

Until  recently  opposition  to  legislation  authorizing  prison  manu- 
facturing operations  has  been  less  in  evidence  among  the  associa- 
tions of  implement  and  vehicle  manufacturers  and  jobbers'  clubs  than 
the  dealers'  associations.  In  July,  1910,  however,  the  implement 
jobbers  of  Minneapolis  appealed  to  the  National  Association  of  Agri- 
cultural Implement  &  Vehicle  Manufacturers  for  financial  aid  and 
moral  support  in  opposition  to  legislation  which  had  been  proposed 
in  that  State  to  authorize  the  manufacture  of  various  kinds  of  har- 
vesting machinery  at  the  State  penitentiary,  in  addition  to  the  manu- 
facture of  binder  twine,  which  had  been  carried  on  there  for  a  num- 
ber of  years.  The  Minneapolis  jobbers  advised  the  secretary  of  the 
National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 
facturers that  if  such  legislation  were  enacted  it  would  ruin  the 
implement  business  in  that  State,  and  that  in  view  of  this  fact  the 
jobbers  had  investigated  the  possibilities  of  stopping  the  activities 
of  the  prison  authorities  by  an  action  in  the  courts  to  have  the  manu- 
facture of  implements  in  the  penitentiary  declared  illegal.  As  the 
jobbers  felt  that  the  manufacturers  would  be  as  much  affected  as  the 
jobbers,  the  latter  felt  that  the  members  of  the  National  Association 
of  Agricultural  Implement  &  Vehicle  Manufacturers  should  bear  a 
portion  of  the  expense  of  such  a  suit.  The  executive  committee 
of  the  National  Association  of  Agricultural  Implement  &  Vehicle 
Manufacturers  directed  the  secretary  of  the  association  to  get  in  touch 
with  the  parties  interested,  and  assure  them  of  the  interest  of  the 
manufacturers'  association  in  the  matter.    The  committee  also  ex- 


ACTIVITIES  WITH   RESPECT  TO   LEGISLATION. 


109 


108 


FARM-MACHINERY  TRADE  ASSOCIATIONS. 


.r 


pressed  its  opinion  that  steps  should  be  taken  by  the  association  to 
secure  the  passage  of  a  National  law  forbidding  States  to  manufac- 
ture goods  at  penal  institutions. 

In  further  correspondence  with  the  Minneapolis  jobbers,  the  lat- 
ter explained  that  during  the  three  preceding  sessions  of  the  Minne- 
sota Legislature,  the  implement  houses  at  Minneapolis  had  maintained 
a  committee  to  fight  the  proposition,  with  only  partial  success,  as  the 
legislature  had  authorized  the  expenditure  of  a  considerable  sum 
of  money  to  equip  and  operate  a  factory  for  buildmg  binders, 
mowers,  and  hayrakes,  and  a  number  of  experimental  machines  had 
been  made  in  1909.    It  was  pointed  out  that,  while  the  quantity  made 
up  to  that  time  was  not  great,  the  prices  asked  by  the  State  were  so 
far  below  those  that  regular  manufacturers  and  dealers  had  to  ask 
that  it  was  easy  to  see  what  the  result  would  be  when  the  output  be- 
came larger.    Furthermore,  a  strong  effort  was  being  made  to  have 
manure  spreaders  added  to  the  line  manufactured  at  the  penitentiary. 
In  regard  to  the  legal  action  contemplated,  the  manufacturers'  asso- 
ciation was  advised  that  the  plan  had  been  outlined,  makmg  citizens 
of  Minnesota  parties  to  the  suit,  so  that  the  manufacturers  associa- 
tion was  not  expected  to  have  anything  to  do  with  starting  the 
action,  but  were  asked  to  help  in  providing  funds.    The  executive 
committee  of  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers  requested  the  attorney  of  that  association  to 
render  an  opinion  on  the  constitutionality  of  the  Minnesota  law,  and 
in  doing  so  he  reached  the  conclusion  that  the  establishment  of  manu- 
f  acturing  operations  was  in  conflict  with  the  State  constitution. 

Meantime  a  small  number  of  manufacturers  m  Minnesota  had 
formed  an  organization,  known  bs  the  Minnesota  Manufacturers 
Association,  to  oppose  legislation  such  as  that  authorizing  the  State 
to  engage  in  the  manufacture  of  manure  spreaders.  The  board  of 
directors  of  this  association  was  largely  composed  of  manufacturers 
and  jobbers  of  implements  and  allied  lines.  The  chairman  was  a 
member  of  the  National  Implement  &  Vehicle  Association,  and  the 
treasurer  was  an  official  of  an  implement-manufacturing  concern  at 
Minneapolis,  and  also  of  the  implement  jobbers'  club  of  Mmneapolis 
and  St  Paul.  The  secretary  of  this  association  wrote  to  the  secretary 
of  the  National  Implement  &  Vehicle  Association,  stating  that  a  good 
man  was  needed  at  once  and  inquiring  whether  the  manufacturers 
association  could  do  anythmg  in  the  matter.  ,   «.  ^r  v.-  i 

The  executive  committee  of  the  National  Implement  &  Vehicle 
Association  appears  to  have  become  apprehensive  concerning  the 
possibilities  of  a  great  manufacturing  enterprise  being  built  up  at 
the  Minnesota  State  prison,  believing  that  such  an  enterprise,  if 
successful,  would  be  likely  to  be  copied  in  other  States.  At  a  meet- 
ing of  that  committee  held   at  Kansas  City  in  January,  1911, 


ii 


-4 


4)  i  # 


the  secretary  of  the  association  was  instructed  to  investigate  this 
proposition.  In  company  with  two  Wisconsin  manufacturers  be- 
longing to  the  National  Implement  &  Vehicle  Association,  he  con- 
ferred with  the  manufacturers  and  jobbers  in  Minneapolis  in  regard 
to  the  proposed  attack  on  the  right  of  the  State  to  engage  in  prison 
manufacturing.  He  reported,  however,  that  he  found  the  local 
manufacturers  and  jobbers  had  become  indisposed  to  raise  the  issue 
on  the  items  already  manufactured  at  the  prison,  because  they  had 
been  assured  that  the  bill  introduced  to  authorize  the  manufacture 
of  wagons  and  manure  spreaders  would  not  be  presented  for  pas- 
sage.^ Subsequently  the  Minneapolis  wholesalers  and  manufactur- 
ers apparently  made  some  unsuccessful  efforts  with  the  legislature 
to  secure  the  adoption  of  some  resolutions  providing  for  the  appoint- 
ment of  a  committee  to  investigate  the  manufacturing  operations  at 
the  State  penitentiary. 

In  March,  1911,  the  secretary  of  the  National  Implement  & 
Vehicle  Association  reported  to  the  executive  committee  that  it  had 
been  determined  to  look  into  the  situation  in  Wisconsin,  where  build- 
ings had  been  built  and  machinery  purchased  for  the  prison  manu- 
facture of  twine.  The  chairman  of  the  association's  committee  on 
State  legislation  had  been  instructed  to  secure  an  opinion  of  the 
constitutional  right  of  the  State  to  engage  in  manufacturing.  The 
secretary  of  the  association  stated,  however,  that  this  opinion,  which 
had  been  rendered  by  a  prominent  attorney  of  Milwaukee,  did  not 
take  a  sufficiently  positive  view  against  the  constitutionality  of  the 
act  to  warrant  the  association  in  bringing  suit.  The  secretary  sug- 
gested that  the  association  begin  a  campaign  of  education  through 

» In  connection  with  this  reluctance  of  the  local  manufacturers  and  Jobbers  to  take  up 
this  matter,  the  comment  of  a  representative  of  the  National  Implement  &  Vehicle  Asso- 
ciation is  interesting.  In  a  letter  to  one  of  the  manufacturers  he  intimated  that  this 
was  probably  due  to  "  the  feeling  on  their  part  that  by  allowing  the  continuance  of  the 
manufacture  of  binder  twine  they  were  hitting  at  a  certain  large  concern  which  manu- 
factures a  large  quantity  of  that  commodity."  The  comment  of  one  of  the  prominent 
implement  men  in  Minnesota  is  also  of  interest.     He  asserted  that — 

there  has  already  been  a  disposition  on  the  part  of  the  implement  fraternity  in  this 
territory  to  avoid  the  undesirable  notoriety  which  would  necessarily  follow  the  trial 
of  such  a  case  in  the  courts.  There  has  been  the  ever  present  fear  that  the  farmers 
would  iumn  at  the  conclusion  that  the  Implement  jobbers  and  manufacturers  were  all 
involved  In  some  huge  trade  combination  for  the  express  purpose  of  defrauding  the 
farmer  or  putting  him  at  the  mercy  of  the  Implement  manufacturers.  In  other 
words  'the  gum-shoe  policy  has  prevailed  here  in  connection  with  this  implement  fac- 
tory proposition  as  well  as  in  connection  with  the  bhider  twine  proposition  twenty-five 

^^As  a^matter  of  fact,  it  was  argued  here  that  to  oppose  the  establishment  of  a 
factorv  in  Stillwater  for  the  manufacture  of  harvesting  machinery,  including  binders, 
mowers  and  rakes,  the  Implement  fraternity  would  lay  themselves  open  to  a  charge 
of  fighting  the  battles  of  the  International  harvester  Co.  On  one  side  was  the  prison 
competition,  on  the  other  side  the  trust  bugaboo.  They  ran  away  from  the  bugaboo 
and  fell  Into  the  arms  of  convict  competition.  .     ,^      ,  .      ,  *.    t     ^.u    cs*.-*- 

I  am  of  the  opinion  that  the  manufacture  of  agricultural  Implements  in  the  State 
Drtson  will  for  many  years  to  come  be  confined  to  harvesting  machinery ;  or,  at  least, 
to  the  class  of  machinery  now  made,  namely— binders,  mowers,  and  rakes.  There  is 
absolutely  nothing,  however,  to  prevent  any  future  legislature  from  extending  at 
win  the  list  of  gi>od8  to  be  manufactured.  The  only  restraining  Influence  Is  the 
fact  that  some  other  lines  of  Implements  are  made  In  Minnesota  By  free  labor,  and 
a  strong  argument  In  favor  of  making  harvesting  machinery  with  wnvict  labor  has 
been  that  It  did  not  Interfere  with  any  enterprise  in  this  State  employing  free  labor. 
It  was  for  this  reason  we  received  only  a  lukewarm  support  from  the  labor  dele- 
gates and  the  labor  lobby  m  opposing  the  measure  before  the  several  legislatures. 


110 


FABM-MACHINEBY  TBABE  ASSOCIATIONS. 


the  medium  of  farm-trade  papers  against  what  he  termed  the  grow- 
ing tendency  in  agricultural  States  to  engage  in  prison  manufac- 
turing, especially  in  those  products  which  affect  the  dealer-customers 
of  the  implement  and  vehicle  manufacturers.  He  also  referred  to 
the  appointment  of  a  committee  of  the  Western  Betail  Implement  & 
Vehicle  Dealers'  Association  to  cooperate  with  the  National  Imple- 
ment &  Vehicle  Association  in  investigating  the  cost  of  manufac- 
turing binder  twine  at  State  prison  plants,  by  which  means  he 
thought  valuable  data  could  be  gathered  for  use  to  open  the  eyes  of 
the  farmers  throughout  the  West,  and  also  taxpayers,  to  the  fact 
that  few  ventures  of  this  sort  have  shown  even  paper  profits.  After 
some  discussion  on  this  report  one  of  the  members  (who  was  himself 
interested  in  the  manufacture  of  binder  twine  and  cordage)  offered 
a  resolution  instructing  the  secretary  of  the  association  to  begin  a 
campaign  of  education  in  States  where  the  danger  was  most  immi- 
nent, the  work  to  be  done  in  connection  with  the  association's  com- 
mittee on  State  legislation.  At  a  later  meeting  of  the  executive 
committee  of  the  National  Implement  &  Vehicle  Association,  at  which 
the  secretary  made  a  report  on  the  situation  in  Wisconsin,  the  secre- 
tary and  two  Wisconsin  members  of  the  association  were  appointed 
to  confer  with  the  International  Harvester  Co.  with  power  to  act  in 
the  premises.  Later,  at  a  conference  between  this  committee  and  a 
repiesentative  of  the  International  Harvester  Co ,  it  was  decided  that 
if  any  move  was  to  be  made  it  should  be  by  a  taxpayer  in  Wisconsin. 


^ 


<. 


CHAPTER  V. 

COHCEimiATIOlSr  IN  OWNERSHIP  OF  WIITO-STACKEE  PATENTS. 

Section  1.  Introduction. 

Efforts  to  maintain  the  price  of  goods  of  competing  manufac- 
turers have  not  been  entirely  confined  to  the  cooperative  efforts  of 
trade  associations.  The  price-making  conditions  in  the  harvesting- 
machine  branch  of  the  industry  have  been  already  described  in  the 
Bureau's  report  on  the  International  Harvester  Co.  In  the  thresher 
branch  of  the  industry  there  exists  a  patent-holding  company,  which, 
through  control  of  numerous  patents  relating  to  the  stacking  of 
straw  and  chaff  by  means  of  pneumatic  blowers  or  wind  stackers, 
fixes  the  price  at  which  such  stackers  are  sold  by  every  manufacturer 
of  threshing  machinery.  The  patent-holding  company  is  itself  con- 
trolled by  the  managing  directors  of  one  of  the  largest  threshing- 
machine  companies. 

Section  2.  Origin  of  the  wind-stacker  patents-license  system. 

The  first  commercially  successful  device  to  carry  away  the  straw 
and  dust  from  a  threshing-machine  separator  by  means  of  an  air 
blast  was  invented  in  the  latter  eighties  by  James  Buchanan,  of 
Indianapolis,  Ind.  He  organized  a  company  known  as  the  Cyclone 
Co.,  to  manufacture  the  stacker  which  could  be  attached  to  threshing 
machines  made  by  the  different  manufacturers.  Financing  this  com- 
pany and  introducing  its  output  was  an  expensive  undertaking,  and, 
although  outside  investors  became  interested,  the  capital  of  the 
Cyclone  Co.  was  soon  exhausted  and  at  the  close  of  the  season  of  1890 
it  became  financially  embarrassed.  A.  A.  McKain,  also  of  Indian- 
apolis, who  had  become  interested  in  the  company,  agreed  to  assume 
part  of  its  indebtedness  in  return  for  territorial  rights  in  the  States 
east  of  the  Mississippi  Eiver  and  in  Minnesota,  North  Dakota,  and 
South  Dakota. 

Buchanan  immediately  made  application  for  a  patent  on  the 
machine  he  had  completed.  McKain  organized  the  Indiana  Manu- 
facturing Co.,  under  the  laws  of  the  State  of  Indiana,^  in  the  early 
part  of  1891  and  proceeded  to  make  a  number  of  stackers  under 
Buchanan's  invention  and  to  attach  them  to  different  makes  of  sepa- 
rators.   The  manufacturers  of  threshing  machines  were  obliged  to 


1  The  company  was  reincorporated  in  1900  in  West  Virginia. 


t^ 


111 


112 


FABM-MACHIN£J1Y   TBADE  ASSOCIATIONS. 


send  their  separators  to  the  factory  in  order  that  the  wind  stacker 
might  be  attached.  The  Indiana  Manufacturing  Co.  thus  began  oper- 
ations as  a  manufacturing  company,  but  early  in  the  threshing  season 
of  1892  the  directors  decided  to  grant  licenses  to  the  thresher  manu- 
facturers, under  which  they  should  be  able  to  make  stackers  them- 
selves upon  payment  of  royalty. 

The  first  of  these  license  contracts  was  made  in  October,  1892, 
with  Gaar,  Scott  &  Co.,  threshing-machine  manufacturers  at  Rich- 
mond, Ind.  Under  this  contract  the  licensee  agreed  to  pay  a  royalty 
fee  of  $30  upon  each  wind  stacker  covered  by  the  license,  to  furnish 
twice  a  year  statements  of  stackers  made  and  sold  under  the  contract, 
and  to  allow  the  licensor  to  examine  books  and  accounts  concerning 
the  manufacture  and  sale  of  stackers.  Further,  the  licensee  agreed 
to  maintain  a  selling  price  of  $250^  on  time  or  $235  cash  (except 
that  agents  should  be  allowed  a  discount  not  exceeding  $25)  and, 
in  case  of  violation,  to  pay  liquidated  damages  of  $100  for  each  vio- 
lation. The  licensee  agreed  not  to  dispute  the  letters  patent  cov- 
ered by  the  license  contract  nor  to  make  their  alleged  invalidity  a 
defense  in  any  proceeding  under  the  contract,  or  a  ground  of  re- 
fusal to  make  payments  called  for  thereunder.  Under  this  contract, 
the  licensor  agreed,  among  other  things,  to  give  to  the  licensee  the 
right  to  use  all  improvements,  made  by  them,  on  the  stacker  de- 
scribed in  the  invention,  without  additional  royalty  fee.  The  licensor 
agreed  further  that,  if  more  favorable  terms  were  granted  to  any 
other  licensee,  Gaar,  Scott  &  Co.  should  be  entitled  to  receive  them, 
and  such  modifications  were  to  become  a  part  of  the  contract.  The 
licensor  was  given  the  right  to  cancel  the  contract  on  failure  of  the 
licensee  to  meet  the  payment  of  accruing  royalties.  In  this  contract 
specific  mention  was  made  of  only  two  patents,  namely,  Buchanan's 

1  The  manner  in  which  the  price  of  $250  was  decided  upon  was  explained  in  1904  by  the 
president  of  the  company.     In  this  connection,  he  said : 

The  mounted  stacker  [the  type  of  stacker  generally  in  use  when  the  wind  stacker 
was  introduced!  was  listed  jienorally  at  $200.  Its  oporations  required  a  short  carrier 
which  was  generally  listed  by  the  manufacturers  at  $30  additional.  The  defendant 
company  I  believe  at  that  time  listed  short  carriers  at  $40.  So  that  in  establishing 
the  price  of  the  wind  stacker  at  $250,  as  the  short  carrier  was  not  necessary  in  any 
case  where  the  wind  stacker  was  used,  the  actual  increase  of  price  to  the  user  was 
from  $10  to  $20,  while  the  increased  capacity  for  work  enabled  him  in  the  beginning 
to  get  a  cent  extra  [per  bushel]  for  threshing  wheat  and  a  half  cent  extra  for  thresh- 
ing oats.  But  the  extra  amount  threshed  always  enabled  the  operator  to  earn  enouRh 
extra  in  the  season  to  make  his  payments  on  the  stacker,  which  were  but  $125 
annually  for  two  years. 
He  did  not' explain  the  manner  in  which  the  price  of  $150  for  wind  stackers  attached 
to  clover  hullers,  corn  shredders,  and  pea  and  bean  threshers  was  determined. 

A  brief  filed  in  the  Case  suit  by  an  attorney  of  the  Indiana  Manufacturing  Co.  in 
1905  alleged  that  it  was  admitted  by  the  Case  company  that  the  selling  price  of  $250 
furnished  the  manufacturer  with  a  profit  of  at  least  $100.  The  general  manager  of  the 
Case  company  testified  that  the  shop  cost  of  that  company  in  manufacturing  stackers 
was  about  $60  to  $65.  With  the  payment  of  the  $30  royalty  fee  to  the  licensor  and  a 
commission  of  $25  to  dealers,  this  would  leave  about  $30  or  $35  to  cover  the  selling  costs 
and  general  expenses  of  the  licensee.  In  view  of  the  alleged  $100  profit  on  each  stacker, 
it  is  perhaps  hardly  surprising  that  in  testimony  offered  by  several  thresher  manufac- 
turers in  the  Indiana-Case  suit  they  concurred  in  expressing  the  opinion  tliat  $250  was  a 
reasonable  price  to  the  consumer. 


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CONCENTKATION  IN   OWNERSHIP   OF   WIND-STACKER  PATENTS.      113 

patents  of  1884  and  1892.  Before  the  end  of  1893  nearly  all  the 
larger  manufacturers  of  threshing  machinery  in  the  United  States 
except  the  J.  I.  Case  Threshing  Machine  Co.  had  taken  out  licenses. 
In  negotiating  these  contracts,  McKain,  as  president  of  the  Indiana 
Manufacturing  Co.,  seems  to  have  held  out  as  a  chief  inducement  the 
fact  that,  as  all  licensees  were  required  to  maintain  a  uniform  selling 
price  of  $250  and  to  make  a  fixed  royalty  payment  of  $30,  all  licensees 
would  be  assured  of  a  substantial  profit. 

In  1895  the  Indiana  Manufacturing  Co.  gave  up  the  manufacture 
of  stackers  altogether,  thereafter  confining  its  business  exclusively  to 
the  acquisition  of  patents,  the  issuance  of  license  contracts,  and  the 
maintenance  of  its  license  system.  To  build  up  this  license  system 
had  already  become  the  principal  object  of  the  company.  In  1892, 
arrangements  had  been  made  by  McKain  and  three  of  his  associates 
in  the  Indiana  Manufacturing  Co.  to  acquire  the  rights  in  the  dis- 
tricts that  had  been  reserved  by  the  inventor,  Buchanan.  These 
rights  were  purchased  for  the  payment  of  $10,000  per  annum  imtil 
the  expiration  of  the  patent.  This  agreement  was  assigned  to  a  com- 
pany known  as  the  Farmers'  Friend  Stacker  Co.,  which  was  organized 
with  a  nominal  capital  of  $50,000.  By  this  arrangement  the  interests 
of  the  two  companies  were  united,  and  in  1893  the  Farmers'  Friend 
Stacker  Co.  was  merged  with  the  Indiana  Manufacturing  Co.  The 
Indiana  Manufacturing  Co.  also  began  to  acquire  other  patents 
relating  to  the  wind  stacker.  Some  were  purchased  outright,  and 
in  other  cases  arrangements  were  made  to  acquire  manufacturing 
rights  for  the  licensees.  Some  of  these  patents  were  acquired  from 
licensees.  To  the  Buchanan  patents  were  added  those  of  Nethery 
and  of  Landis,  brought  out  in  1893  and  1894.  At  this  time,  or  sub- 
sequently, were  added  the  patents  of  Kirshman,  Seburn,  Springer, 
Bartholomew,  Ross,  Russell,  Reeves,  Robinson,  Elward,  and  others. 
By  1895  more  than  20  patents  had  been  acquired,  and  in  1904  the 
number  had  risen  to  above  100,  the  cost  of  acquiring  which  is 
reported  to  have  been  approximately  $600,000,  in  addition  to  royal- 
ties paid  to  patentees.  The  company  sought  to  secure  not  only  all 
patents  of  fundamental  importance,  but  also  those  of  a  subsidiary 
character.  The  object  of  this  was  not  only  to  strengthen  its  own 
position  but  also  to  avoid  the  possibility  of  vexatious  litigation  for 
itself  and  its  licensees.  Furthermore,  control  was  secured  of  the 
Sattley  Stacker  Co.,  manufacturing  slat  stackers,  which  sold  at  a 
lower  price  than  the  wind  stacker.  The  acquisition  of  this  company, 
which  licensed  other  manufacturers  to  make  slat  stackers  under  its 
patents,  resulted  in  a  diminished  sale  of  slat  stackers  and  an  increase 
in  the  sale  of  wind  stackers.    (See  footnote  on  p.  125.) 

68248°— 15 8 


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114 


FARM-MACHINERY  TRADE  ASSOCIATIONS. 


Section  3.  Gontroreny  between  the  Indiana  Mannfactnring  Go.  and  the 
J.  I.  Gase  ThresMng  Machine  Go. 

The  payment  of  royalties  to  the  Indiana  Manufacturing  Co.,  under 
its  wind-stacker  license  system  seems  to  have  been  especially  dis- 
tasteful to  the  J.  I.  Case  Threshing  Machine  Co.  The  operation  of 
the  wind  stacker  made  necessary  the  use  of  engines  larger  than  those 
which  had  been  employed  and  threatened  the  use  of  the  power- 
generating  appliance,  known  as  a  horsepower,  upon  which  the  Case 
company  owned  some  patents  and  had  built  up  a  profitable  license  and 
manufacturing  business.  The  Case  company  entered  into  negotia- 
tions in  1892  to  join  with  two  other  companies  in  purchasing  the 
patents  of  the  Indiana  Manufacturing  Co.,  but  this  plan  was  given 
up,  and  during  the  seasons  of  1893  and  1894  that  company  stood 
almost  alone  among  the  principal  thresher  manufacturers  in  refusing 
to  enter  the  license  system.  In  April,  1895,  however,  a  license  con- 
tract was  signed  between  the  Indiana  Manufacturing  Co.  and  the 
Case  company.  After  operating  under  this  contract  for  a  time 
a  change  took  place  in  the  ownership  of  the  Case  company,  and  the 
new  owners  complained  that  the  wind  stackers  which  they  were 
making  under  the  Nethery  patents  of  the  Indiana  Manufacturing 
Co.  were  not  giving  satisfaction  and  that  their  company  was  sustain- 
ing heavy  losses  in  attempting  to  market  them.  In  1898  the  cata- 
logue of  the  Case  company  omitted  all  mention  of  wind  stackers,  and 
the  company  arranged  to  secure  wind  stackers  absolutely  necessary 
for  its  trade  from  another  licensee  of  the  Indiana  Manufacturing  Co. 
The  Indiana  Manufacturing  Co.  sought  to  induce  the  Case  company 
to  resume  the  manufacture  of  stackers  under  its  license  of  1895,  but 
the  Case  company's  attitude  in  November,  1898,  and  the  reason  alleged 
therefor,  are  shown  in  the  following  extract  from  a  letter  from  its 
president  to  the  president  of  the  Indiana  Manufacturing  Co. : 

As  you  say,  if  the  [Case]  T.  M.  Co.  should  sell  1,500  wind 
stackers  during  the  year  1899  they  would  be  owing  you  under 
the  terms  of  the  written  contract,  $45,000,  and  we  hasten  to 
notify  you  that  we  shall  not  bear  such  a  burden.  If  a  wind 
stacker  is  a  necessity  to  our  customers  we  must  manufacture  one 
which  will  not  infringe  any  of  your  patents. 

In  the  following  month  the  president  of  the  Indiana  Manufactur- 
ing Co.  had  a  conference  with  the  Case  company.  He  was  told  by 
the  legal  adviser  for  the  Case  company  that  the  license  contract  was 
invalid  and  void,  and  by  the  directors  that  unless  the  Case  com- 
pany's losses  in  trying  to  market  the  Nethery  stacker — estimated  at 
$170,000— were  adjusted  the  Case  company  would  undertake  to  make 
stackers  independently  of  its  license  contract.  No  agreement  was 
reached  until  a  later  conference  between  the  same  parties  in  January, 
1899.    McKain  then  told  the  Case  company  that  he  admitted  no  just 


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CONCENTRATION   IN   OWNERSHIP   OF   WIND-STACKER  PATENTS.      115 

claim  on  their  part,  but,  in  view  of  their  power,  and  in  order  to 
secure  harmony,  he  agreed  to  allow  about  $46,000  in  settlement  af 
their  claims.  This  offer  was  accepted,  and  a  supplementary  contract 
was  entered  into,  providing  that  the  Case  company  should  resume 
the  manufacture  and  sale  of  stackers  under  its  contract  of  1895  and 
not  question  its  validity  for  the  future,  and  that  royalties  accruing 
each  year  to  the  Indiana  Manufacturing  Co.  in  excess  of  a  fixed  siun 
should  be  retained  by  the  Case  company,  until  the  amount  agreed 
upon  had  been  fully  paid.  When  the  settlement  of  the  business  for 
the  season  of  1901  was  made,  the  Case  company  received  the  last  pay- 
ment due  it  under  this  contract. 

The  license  agreement  entered  into  with  the  Case  company  in  1895 
contained  substantially  the  same  provisions  that  were  included  in 
the  contract  made  with  Gaar,  Scott  &  Co.  in  1892,  and  subsequently 
with  other  licensees.  It,  however,  empowered  the  licensee  to  manu- 
facture, use,  and  sell  wind  stackers,  embodying  the  claims  of  21 
United  States  patents  and  two  Canadian  patents  specifically  named, 
as  well  as  patents  that  might  be  issued  on  applications  then  pending, 
and  a  considerable  number  of  patents  for  whose  use  the  Indiana 
Manufacturing  Co.  had  secured  the  right  to  grant  sublicenses.  It 
also  provided  that  the  term  of  contract  should  extend  "  until  the  full 
end  of  the  term  of  any  such  patent,  and  any  of  the  inventions  of  any 
of  the  aforesaid  letters  patent  controlled  by  the  said  party  of  the 
first  part  [the  Indiana  Manufacturing  Co.]  by  means  of  any  license 
or  agreement  so  long  as  the  licenses  or  agreements  relating  thereto 
are  of  force,  and  any  inventions  which  may  be  hereafter  acquired  by 
the  party  of  the  first  part." 

While  the  right  to  manufacture,  use,  and  sell  wind  stackers  em- 
bodying inventions  under  subsequently  acquired  patents  was  not  spe- 
cifically included  in  the  earlier  Gaar-Scott  contract,  it  would  seem  to 
have  been  implied  in  the  agreement  to  allow  the  latter  the  use  of  all 
improvements  that  the  Indiana  Manufacturing  Co.  might  make  on 
Buchanan's  invention,  and  as  favorable  terms  as  those  made  to  any 
other  licensee.  At  any  rate  no  controversy  appears  to  have  arisen 
over  this  matter.^ 

In  August,  1902,  the  so-called  Elward  patent  which  had  originally 
been  issued  in  December,  1901,  on  an  application  filed  in  January, 
1893,  was  reissued.  The  inventor  claimed  that  his  patent  was  in- 
fringed by  every  wind  stacker  in  use,  and  announced  his  purpose  to 
compel  the  manufacturers  of  threshing  machinery  to  pay  him  for  its 
use.    This  announcement  alarmed  many  of  the  licensees  of  the  Indiana 

*  Some  licensees  seem  to  have  felt,  however,  that  the  Indiana  Manufacturing  Co.,  in 
purchasing  patents  from  various  licensees,  might  in  some  instances  have  paid  amounts 
in  excess  of  the  real  value  of  the  patents  so  acquired,  and  thus  have  violated  the  agree- 
ment to  give  all  licensees  equal  treatment. 


116 


FAKM-MACHINERY   TBADE  ASSOCIATIONa 


Manufacturing  Co.,  and,  accordingly,  the  president  of  the  latter  com- 
pany hastened  to  arrange  to  purchase  the  Elward  patent  for  $100,000. 
The  acquisition  of  this  patent  was  made  not  only  to  protect  the  com- 
pany's licensees  from  the  threatened  attack  of  Elward,  but  also  in 
pursuance  of  the  policy  of  the  Indiana  company  to  acquire  all  desir- 
able patents  relating  to  wind  stackers.  Furthermore,  the  dominating 
character  of  the  Elward  patent  greatly  strengthened  the  position  A 
the  Indiana  company.  In  fact,  it  was  considered  only  second  in 
importance  to  the  original  Buchanan  patent 

The  ownership  of  the  Elward  patent  also  furnished  a  means  by 
which  the  period  of  the  license  contracts  might  be  extended  beyond 
the  expii-ation  of  the  Buchanan  patent  in  1909.  As  already  shown, 
the  Case  company  contract  of  1895  had  contained  a  provision  ex- 
tending its  existence  to  the  end  of  any  of  the  patents  therein  men- 
tioned. The  contracts  then  in  force  with  other  licensees  provided 
that  all  should  share  alike  in  respect  to  any  privilege  granted  to  any 
licensee.  On  the  whole  it  was  thought  best  to  enter  into  new  contracts 
with  all  the  licensees,  giving  them  the  right  to  use  the  Elward  patent 
and  others  that  might  be  acquired  without  the  payment  of  additional 
royalty.  By  the  new  contract  it  was  expressly  agreed  that  this  pro- 
vision should  apply  to  any  and  all  newly  obtained  or  acquired  patents 
and  inventions  and  that  the  license  should  be  in  force  until  the  end 
of  the  term  of  each  and  all  of  the  patents  mentioned.  Barring 
unforeseen  contingencies,  this  assured  the  Indiana  Manufacturing 
Co.  of  the  enjoyment  of  its  royalties  until  the  expiration  of  the 
Elward  patent  in  1918.  Otherwise,  its  income  might  be  seriously 
threatened  after  the  expiration  of  the  Buchanan  patent  in  1909. 

It  should  also  be  noted  that  the  new  form  of  license  prepared  at 
this  time  required  orders  for  stackers  to  be  taken  separately  from 
orders  for  other  machinery.  The  purpose  of  this  was  to  prevent 
concessions  in  the  fixed  selling  price  for  stackers  which  might  be 
concealed  if  the  price  were  not  shown  as  a  distinct  item. 

In  the  meantime  F.  L.  Norton,  then  superintendent  of  agencies  of 
the  Case  company,  had  perfected  certain  patents  which  he  claimed 
would  permit  that  company  to  manufacture  wind  stackers  without 
infringing  the  patents  of  the  Indiana  company.  When  the  treasurer 
of  the  Indiana  Manufacturing  Co.  visited  the  Case  company  in 
March,  1902,  Norton  requested  him  to  call  the  attention  of  the  presi- 
dent of  the  Indiana  Manufacturing  Co.  to  these  patents.  The  latter 
met  Norton  at  Chicago  in  April,  1902,  who  told  him  that  the  Nor- 
ton wind  stacker  was  not  covered  by  any  of  the  valid  claims  of  the 
patents  of  the  Indiana  company.  Much  was  said  on  both  sides,  but, 
after  examination  of  the  Norton  patents,  the  patent  attorney  of  the 
Indiana  company  reported  that  the  Norton  stacker  was  covered  by 


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CONCENTRATION   IN   OWNERSHIP   OF   WIND-STACKER   PATENTS.      117 

claims  of  several  of  the  Indiana  company's  patents.  He  also  re- 
ported that  Norton  had  granted  a  shopright  under  his  patents  to 
the  Case  company,  and  that  he  wanted  the  sum  of  $250,000  for  the 
title  to  his  patents,  for  which  he  would  accept  the  royalties  accruing 
under  the  license  contract  between  the  two  companies  as  his  first 

payment. 

The  president  of  the  Indiana  Manufacturing  Co.  testified  subse- 
quently that  when  that  company  refused  to  buy  these  patents  subject 
to  the  shopright  in  the  Case  company,  it  was  informed  that  the 
supplemental  contract  of  1899,  which  the  Case  company  had  made 
to  secure  the  payment  of  the  damages  claimed  by  reason  of  defects 
in  the  stackers  it  had  manufactured  under  the  Nethery  patents,  had 
now  been  fulfilled,  and  that,  if  the  Indiana  company  should  begin 
suit  under  the  license  contract  between  the  two  companies,  the  whole 
wind-stacker  business  would  be  broken  up,  and  within  60  days  wind 
stackers  would  be  selling  for  $150.  Notwithstanding  this  attitude, 
when  the  Case  company  refused  to  pay  royalties  for  1902  the  Indiana 
Manufacturing  Co.  proceeded  to  bring  suit. 

The  bill  of  the  Indiana  company  which  was  filed  in  the  United 
States  Circuit  Court  for  the  Eastern  District  of  Wisconsin  in  April, 
1903,  asked  for  an  injunction  against  the  infringement  of  the 
Buchanan  patent  of  1892  and  four  later  patents  by  Landis  and 
Nethery,  or  any  use  of  them  not  in  accord  with  the  terms  agreed 
upon,  and  for  an  accounting  under  its  license  contract  with  the  Case 
company.  The  latter  in  its  answer  contended  that  there  had  been 
no  infringement,  and,  even  if  there  had  been,  the  contract  was  not 
enforceable,  for,  if  ever  valid,  it  had  been  broken  by  the  Indiana 
Manufacturing  Co.  in  granting  more  favorable  terms  to  other 
licensees;^  furthermore,  that  it  was  void  from  the  beginning  as  a 
part  of  an  illegal  combination  in  restraint  of  trade. 

The  decision  of  the  circuit  court,  rendered  August  22,  1906  (148 
Fed.  Rep.,  21),  found  that  the  Indiana  Manufacturing  Co.  had  con- 
federated with  all  the  manufacturers  of  threshing  machines  in  the 
country  in  a  plan  of  uniform  licenses  under  combined  patents  with 
a  uniform  price  for  the  product.  It  held  in  "effect  that  the  license 
system  of  the  Indiana  Manufacturing  Co.  extended  beyond  the 
monopoly  intended  to  be  created  by  the  patent  law  in  the  beneficial 
use  of  specific  inventions,  and  that  the  system  was  intended  to  create 
a  further  monopoly  by  combining  patent  rights  in  violation  of  the 
law.  In  the  opinion  of  the  court,  the  devices  of  all  the  patents  of 
the  Indiana  Manufacturing  Co.  were  not  capable  of  conjoint  use 
in  a  single  machine — a  number  of  them  covering  noninterfering  de- 

^  Relying  apparently  on  the  different  prices  that  had  been  paid  certain  other  licensees 
for  patents  or  for  the  right  to  manufacture  under  •them. 


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FARM-MACHINERY   TRADE  ASSOCIATIONS. 


vices  performing  the  same  fimctions  and  capable  of  independent 
use  by  different  manufacturers. 

While  this  suit  was  pending  on  appeal  in  the  circuit  court  of 
appeals,  in  the  latter  part  of  1906,  a  crisis  arose  in  the  affairs  of  the 
Indiana  Manufacturing  Co.  The  president  of  the  company,  who 
was  one  of  its  largest  stockholders,  had  pledged  his  shares  as  col- 
lateral for  loans  for  investment  in  other  enterprises,  which  had 
proved  unsuccessful.  The  Indiana  Manufacturing  Co.  was  heavily 
in  debt,  and  the  litigation  with  the  Case  company  had  involved  much 
expense.  Trustees  who  had  been  appointed  to  manage  the  personal 
affairs  of  the  president  of  the  company  were  also  appointed,  in 
March,  1907,  as  an  executive' committee  to  exercise  the  duties  of  the 
directors  in  managing  the  affairs  of  the  company.  The  president  of 
the  company  consented  to  a  sale  of  his  shares  of  stock,  and  the  vice 
president  of  the  company,  Theophilus  King,  who  was  one  of  the 
president's  personal  trustees  and  a  member  of  the  executive  com- 
mittee, was  authorized  to  sell  these  shares.  During  the  spring  of 
1907  King  visited  the  office  of  the  Case  company  and  offered  the 
shares  at  $55,  but  this  offer  was  refused,  Norton,  of  the  Case  com- 
pany, taking  the  position  that  as  soon  as  the  Buchanan  patent  ex- 
pircKl  in  1909  the  Case  company  could  do  all  its  own  business  under 
the  Norton  patents  and  not  be  obliged  to  pay  royalty  to  the  Indiana 
Manufacturing  Co.  As  King  made  no  headway,  he  at  once  began 
negotiations  with  a  committee  of  different  thresher  manufacturers 
and  gave  them  an  option  to  purchase  the  stock  at  $40  per  share. 

In  an  opinion  filed  in  April,  1907  (154  Fed.  Rep.,  365),  the  Ckcuit 
Court  of  Appeals  for  the  Seventh  Circuit  reversed  the  decision  of  the 
circuit  court  referred  to  above.  In  the  view  of  the  court  of  appeals 
the  license  contracts,  in  requiring  the  licensees  to  maintain  a  uniform 
selling  price,  were  not  in  violation  of  the  law.  The  contentions  that 
the  Indiana  Manufacturing  Co.  had  itself  first  violated  the  contract 
and  that  there  was  no  infringement  were  both  found  to  be  un- 
sustained  by  the  evidence.  The  court  therefore  reversed  the  decree 
of  the  lower  court,  and  directed  that  a  decree  be  entered  in  favor  of 
the  Indiana  Manufacturing  Co.,  in  accordance  with  the  prayer  of  the 
bill  of  complaint.  It  was  said  that,  in  permitting  a  customer  to  get 
a  stacker  as  a  part  of  the  separator  of  his  choice,  rather  than  con- 
fining the  use  of  stacker  patents  to  a  single  manufacturer,  the  Indiana 
Manufacturing  Co.  had  given  the  public  something  beyond  the  power 
of  the  latter  to  demand.  The  opinion  did  not  regard  the  patents 
sued  on  as  competing  patents.  The  concurrence  of  one  of  the  judges 
in  the  result  was  based  upon  the  view  that — 

The  patents  as  an  entirety,  therefore,  constitute  a  single  me- 
chanical evolution — are  Wossoms  from  the  same  trunk — and  in 


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^? 


CONCENTRATION  IN   OWNERSHIP   OF   WIND-STACKER  PATENTS.      119 

no  sense  are  competitive  patents;  from  which  it  follows  that 
their  concentration  in  one  control  is  in  no  sense  a  combination  to 
prevent  competition. 
A  petition  for  a  writ  of  certiorari  was  then  filed  in  the  Supreme 
Court  of  the  United  States. 

Section  4.  Result  of  settlement  with  the  Case  company. 

Shortly  after  the  decision  adverse  to  the  Case  company  in  the 
circuit  court  of  appeals,  Frank  K.  Bull,  president  of  the  Case  com- 
pany, reopened  negotiations  with  officers  of  the  Indiana  Manufactur- 
ing Co.,  intimating  that  he  might  be  able  to  organize  a  syndicate  to 
purchase  a  controlling  interest  in  the  stock  of  the  latter  company. 
Up  to  this  time  the  negotiations  appear  to  have  been  only  for  the 
sale  of  the  stock  owned  by  the  president  of  the  Indiana  company, 
whose  holdings  fell  considerably  short  of  a  majority  of  the  shares. 

During  the  negotiations  for  control  of  the  Indiana  Manufacturing 
Co.  which  followed,  it  is  claimed  that  no  discussion  took  place  regard- 
ing the  settlement  of  the  litigation  which  was  pending  in  the  Supreme 
Court  of  the  United  States,  awaiting  a  decision  of  that  court  on  the 
petition  to  grant  a  writ  of  certiorari.  The  brief  which  had  been  filed 
in  support  of  the  petition  by  the  attorneys  of  the  Case  company 
sought  to  show  that  the  Indiana  Manufacturing  Co.  really  held  not 
merely  a  patent  monopoly  authorized  by  the  patent  law,  but  that  it 
really  amounted  to  a  monopoly  of  competing  patents  covering  the 
whole  wind-stacker  industry,  and  that,  therefore,  the  company  had 
effected  an  illegal  combination  in  restraint  of  trade,  even  if  the  license 
contracts  were  valid  when  based  upon  a  single  patent.  This  raised 
the  question  whether  numerous  patents,  pertaining  to  a  given  indus- 
try, including  those  of  different  inventors,  might  lawfully  be  brought 
under  a  single  control  to  deprive  the  public  of  the  benefits  of  com- 
petition which  they  would  otherwise  enjoy. 

The  decision  in  the  circuit  court  of  appeals  had  been  favorable  to 
the  Indiana  Manufacturing  Co.,  but  the  contest  had  proved  a  severe 
strain  upon  its  resources,  and  it  was  on  the  verge  of  bankruptcy.  The 
prospect  of  further  expense  necessarily  involved  in  continuing  the  suit 
in  the  Supreme  Court,  and  the  uncertainty  as  to  what  action  that 
court  might  take  in  regard  to  the  petition  before  it,  must  have  been 
matters  of  serious  concern  to  both  parties.  If  the  petition  for  the 
writ  was  granted,  the  Indiana  Manufacturing  Co.  faced  the  possibil- 
ity of  an  adverse  decree,  which  might  end  its  existence,  while,  on  the 
other  hand,  the  Case  company  was  confronted,  not  only  with  being 
obliged  to  pay  over  the  sum  of  $235,000  on  accrued  royalties  that  had 
been  paid  into  court  pending  final  adjudication,  but  also  of  continu- 
ing the  payment  of  royalties  on  future  business.  The  Supreme  Court 
granted  the  petition  to  file  the  writ  on  October  21,  1907  (207  U.  S., 


ill 
II 


1 


120 


tARM-MACHINERY  TBADE  ASSOCIATIONS. 


587),  but  12  days  earlier,  on  October  9,  an  agreement  was  reached 
between  officers  of  the  Indiana  Manufacturing  Co.  and  directors  of 
the  Case  company  by  which  the  latter  purchased  a  majority  ^  of  the 
shares  of  the  Indiana  Manufacturing  Co.'s  stock,  the  total  issue  being 
15,000  shares.  By  this  purchase,  however,  it  must  have  been  obvious 
to  the  buyers,  who  already  owned  nearly  all  of  the  capital  stock  of 
the  Case  company,  that  if  the  litigation  were  continued  their  inter- 
ests would  be  protected,  whatever  its  outcome  might  be.  Moreover, 
if  the  litigation  were  settled,  it  would  allow  the  purchasers  to  par- 
ticipate in  the  profits  from  the  royalties  accruing  from  all  the  differ- 
ent licensees  of  the  Indiana  company,  including  the  $235,000  of 
accrued  royalties  that  had  been  paid  into  court  by  the  Case  company. 

The  first  payment  for  the  stock  to  be  transferred  was  made  on 
October  9,  the  money  being  furnished  by  a  Wisconsin  bank  on  the 
joint  note  of  the  purchasers.  It  was  agreed  that  until  the  purchase 
price  was  paid  the  Union  Trust  Co.,  of  Indianapolis,  should  vote 
the  stock  as  it  might  be  requested  to  by  a  trustee  acting  in  behalf 
of  the  purchasers  and  a  trustee  acting  in  behalf  of  the  sellers,  the 
sellers  and  purchasers  agreeing  that  the  existing  executive  conmiittee 
of  the  Indiana  Manufacturing  Co.  should  be  continued  imtil  the 
stock  was  paid  for  by  the  purchasers,  vacancies  in  this  committee  to 
be  filled  by  persons  designated  by  the  Union  Trust  Co. 

Considerable  secrecy  was  thrown  about  the  purchase  of  the  shares, 
the  reason  subsequently  alleged  being  that  confusion  in  the  minds  of 
competitors  of  the  Case  company  in  distinguishing  between  the 
directors  as  individuals  and  the  Case  company  as  a  corporation 
might  lead  to  a  material  reduction  in  the  earnings  of  the  Indiana 
Manufacturing  Co.  Later,  officers  of  the  Indiana  Manufacturing 
Co.  testified  that  at  the  time  they  were  not  aware  of  the  personnel 
of  the  syndicate,  although  they  understood  that  the  Case  associates 
constituted  at  least  a  part  of  the  syndicate.  Pending  full  payment 
on  the  stock  no  transfer  of  shares  was  to  be  made  on  the  books  of  the 
Indiana  Manufacturing  Co.  Meantime  the  shares  were  to  be  de- 
posited in  escrow  with  the  Union  Trust  Co.,  of  Indianapolis.  It  was 
understood  that  the  depositing  stockholders  should  not  part  with 
control  until  completion  of  the  payments.  Furthermore,  the  pur- 
chasers caused  a  sealed  envelope  to  be  deposited,  containing  instnic- 
tions  as  to  the  parties  to  whom  the  stock  should  be  distributed  when 
it  should  finally  be  delivered.  Even  the  trustee  who  was  appointed 
to  look  after  the  interest  of  the  purchasers  in  the  transaction  of  pur- 
chase was  not  informed  regarding  the  personnel  of  the  syndicate. 

^  Im  tills  connectioii,  the  president  of  the  Case  company,  who  was  one  of  the  pnrchasers, 
has  testUled,  as  follows: 

We  wanted  to  control  the  company.  •  •  •  We  bought  the  stock  for  an  in- 
vestment. If  we  put  in  the  amount  of  money  that  we  put  in  as  an  investment  we 
would  want  control.  That  la  exactly  the  condition  we  made  on  a  former  tentative 
offer  for  the  stock. 


I 


%  •' 


r 


w  fi 


CONCENTRATION   IN   OWNERSHIP   OF   WIND-STACKER  PATENTS.      121 

Shortly  after  the  first  payment  was  made  on  the  stock  that  had 
been  deposited,  a  change  took  place  in  the  ownership  of  the  Norton 
patents  by  which  Norton  transferred  an  equal  interest  to  each  of  the 
purchasers,  Norton  himself  being  given  an  opportunity  to  partici- 
pate in  the  purchase  of  the  shares,  of  the  Indiana  company.  These 
arrangements  were  made  as  part  of  one  transaction.  Up  to  this  time 
King  had  unsuccessfully  endeavored  to  acquire  the  Norton  patents 
for  the  Indiana  Manufacturing  Co.  King  had  been  instructed  by 
the  executive  committee  of  the  Indiana  Manufacturing  Co.  on  No- 
vember 21,  1907,  to  settle  the  suit  with  the  Case  company,  to  take 
down  the  royalties  that  had  accrued  in  court,  and  to  pay  one-half 
of  this  amount  to  the  Indiana  Manufacturing  Co.  and  a  sum  equal 
to  the  other  half  for  the  purchase  of  the  Norton  patents  and  those 
which  Norton  might  thereafter  acquire  down  to  the  end  of  the 
Elward  patent.  The  agreement  between  the  two  companies  provided 
that  the  accrued  royalties  in  the  possession  of  the  court  should  be 
deposited  with  the  American  Trust  and  Savings  Bank,  of  Chicago, 
one-half  of  the  amount  to  be  paid  to  the  Indiana  Manufacturing  Co. 
and  the  other  half  to  C.  H.  Lee,  trustee  of  the  Norton  patents.  It 
was  also  provided  that  a  new  license  contract  should  be  entered  into 
which  Norton  might  thereafter  acquire  down  to  the  end  of  the 
Elward  patent,  the  Case  company  also  transferring  its  shopright  in 
the  Norton  patents,  on  which  it  was  to  be  allowed  a  royalty  of  $5 
upon  each  stacker  it  made.  It  was  further  agreed  that  the  suit  in 
the  Supreme  Court  should  be  withdrawn  and  discontinued. 

The  making  of  the  new  license  contract  with  the  Case  company, 
the  settlement  of  the  litigation,  the  purchase  of  the  Norton  patents, 
and  the  transfer  of  the  shopright  of  the  Case  company  under  those 
patents  were  finally  completed  early  in  December,  1907,  all  at  one 
time,  but  as  distinct  transactions.  Norton  insisted  that  the  purchase 
money  for  his  patents  should  not  come  into  the  hands  of  the  Indiana 
Manufacturing  Co.,  partly  perhaps  because  that  company  was  largely 
in  debt  and  had  been  kept  out  of  the  hands  of  a  receiver  only  oy 
reason  of  loans  that  had  been  advanced  by  King. 

Shortly  after  these  agreements  were  signed  the  Case  associates, 
on  December  9,  anticipated  the  second  payment  on  their  shares,  the 
money  which  had  been  paid  for  the  Norton  patents  being  used  for 
this  purpose.  The  final  payment  was  made  in  November,  1908,  after 
which  the  stock  was  delivered  to  the  Wisconsin  Trust  Co.,  of  Mil- 
waukee, in  whose  hands  it  apparently  remained  as  security  for  pur- 
chase money  advanced  until  April,  1910,  when  the  shares  were  dis- 
tributed to  the  new  owners.  Meantime,  Norton  had  become  a  director 
of  the  Indiana  Manufacturing  Co.,  in  March,  1909.  Subsequently, 
one  of  the  Case  associates  testified  that  the  purchasers  expected  to 
have  no  voice  in  the  management  of  the  Indiana  Manufacturing  Co. 


122 


FABM-MACHINERY   TRADE  ASSOCIATIONS. 


until  the  shares  were  fully  paid  for.  He  testified  that  the  executive 
committee  was  to  continue  in  charge  meantime.  He  denied,  how- 
ever, that  this  arrangement  was  made  so  that  in  the  event  of  a  settle- 
ment of  the  litigation  it  might  have  the  appearance  of  being  handled 
by  some  one  other  than  the  purchasers. 

It  is  claimed  that  the  Case  company  advanced  none  of  the  pur- 
chase money  for  the  shares,  either  directly  or  indirectly,  and  did  not 
have  the  slightest  interest  in  that  transaction. 

At  the  request  of  counsel,  the  proceedings  in  the  Supreme  Court 
were  dismissed  on  December  16,  1907  (207  U.  S.,  603),  and  in  Janu- 
ary, 1908,  the  circuit  court  entered  the  decree  which  had  been  ordered 
by  the  circuit  court  of  appeals  in  favor  of  the  Indiana  Manufac- 
turing Co. 

The  acquisition  of  control  of  the  Indiana  company  by  the  Case 
associates,  and  the  concession  by  which  the  Case  company  was  to  be 
allowed  a  royalty  of  $5  on  each  stacker  under  the  patents  of  the 
Indiana  Manufacturing  Co.,  caused  unrest  and  dissatisfaction  among 
other  licensees  of  the  latter  company.  Moreover,  many  of  them  felt 
that  the  payment  of  a  large  sirni  for  the  Norton  patents,  even  if 
paid  to  the  Case  associates  as  individuals,  was  merely  a  colorable 
transaction  to  conceal  a  rebate  to  the  Case  company  of  one-half  of 
the  royalties  that  had  accrued.  Under  the  contract  each  licensee  was 
entitled  to  equal  treatment  with  every  other  licensee.  To  fulfill  this 
agreement,  and  probably  to  prevent  the  possible  recurrence  of  any 
accusation  of  the  grant  of  unwarranted  rebates  under  the  licenses 
that  might  arise  in  the  purchase  of  patents  from  licensees,  the  Indi- 
ana Manufacturing  Co.,  in  1908,  submitted  a  supplemental  contract 
to  each  licensee,  known  as  the  patents  purchase  agreement  ^  (Exhibit 
21,  p.  304),  by  which  it  was  agreed  that  any  licensee  who  would  agree 
to  turn  over  to  the  Indiana  Manufacturing  Co.  all  patents  which  he 
might  own  or  acquire  during  the  term  of  the  license  contract,  would 

»At  a  meeting  of  the  stockholders  of  the  Indiana  Manufacturing  Co.,  held  Mar.  31, 
1909,  the  chairman  explained  the  reason  for  the  adoption  of  the  patents  purchase  agree- 
ment.    His  explanation  is  recorded  in  the  minutes  of  the  meeting,  as  follows : 

On  account  of  the  expiration  of  the  Buchanan  patent  there  were  more  or  less  dis- 
turbed conditions  amongst  our  licensees;  that  there  had  been  a  suggestion  that  when 
the  Buchanan  patent  expired  that  possibly  tbe  royalties  would  be  reduced  and  while 
it  was  nothing  more  than  a  suggestion,  it  was  thought  best  to  meet  this  situation 
if  possib{«e,  and  at  the  same  time  secure  for  the  company  a  return  that  would  aid  in 
making  our  future  as  certain  and  sure  as  possible,  and  out  of  these  negotiations 
with  our  licensees  came  what  we  call  our  **  patents  purchase  agreement  "  which  con- 
templates the  turning  over  to  us  by  any  licensee  who  signs  it  all  the  patents  p«>r- 
taining  to  wind  stackers  which  it  may  have  at  the  time  or  which  it  may  invent  or 
acquire  In  the  future :  and  for  this  consideration  we  pay  for  each  stacker  made 
during  each  year  $5  where  it  is  applied  to  threshing  machines  and  $8)  where  it  is 
appii^  to  clover  hullers,  corn  buskers,  or  pea  or  bean  threshers.  After  a  great  deal 
of  negotiation  the  majority  of  our  licensees  accepted  this  patents  purchase  agree- 
ment and  we  now  have  41  such  contracts  with  various  licensees.  There  are  some 
7  licensees  who  have  not  signed  this  contract ;  3  of  the  7  while  refusing  to  sign  It 
have  paid  their  royalties  in  full ;  4  concerns  refused  to  sign  it  alleging  one  thing  or 
another.  They  also  have  up  to  this  time  refused  to  pay  their  royalties.  Suit  has 
been  brought  against  the  Nichols  A  Shopard  Co.,  the  concern  owing  us  the  largest 
amount ;  M.  Riimely  Co..  l*ort  Huron  Engine  &  Thresher  Co.  and  Minneapolis 
Threshing  Machine  Co.  are  the  other  three  concerns  who  have  refused  to  make  pay- 
ment of  their  royalties  and  after  some  further  negotiations  with  them  if  they  still 
refuse  to  pay.  suit  will  be  commenced  against  them. 


A 


CONCENTRATION  IN   OWNERSHIP   OF   WIND-STACKER   PATENTS.      123 

be  allowed  the  sum  of  $6  on  each  stacker  manufactured  by  him  as 
licensee  of  the  Indiana  company.  This  extended  to  all  licensees 
who  were  willing  to  agree  thereto,  the  same  advantage  that  had 
been  given  the  Case  company  under  its  agreement  to  turn  over  its 
shopright  in  the  Norton  patents  and  other  patents  which  it  might 
acquire.  The  great  advantage  to  the  Indiana  Manufacturing  Co. 
in  this  arrangement  lay  in  the  fact  that  it  promised  to  vest  in  that 
company  the  ownership  of  new  inventions  as  soon  as  they  were 
patented.  It  was  not  impossible,  moreover,  that  among  such  patents 
there  might  be  included  some  of  fundamental  importance  and  some 
that  might  be  used  to  compete  with  others  already  in  the  hands  of 
the  Indiana  Manufacturing  Co.  The  advantage  to  licensees  lay  in 
the  reduction  of  rate  of  the  royalty  payment  under  the  license  con- 
tract and  in  the  further  advantage  that  any  patent  thus  acquired 
by  the  Indiana  Manufacturing  Co.  could  be  used  by  each  of  the 
licensees.  Finally,  it  promised  to  perpetuate  the  license  system  and 
profits  of  company  so  long  as  it  should  hold  any  patent  in  general 
demand  among  threshing-machine  manufacturers. 

Some  of  the  dissatisfied  licensees  of  the  Indiana  Manufacturing 
Co.  refused  to  enter  into  the  supplemental  agreement  for  the  transfer 
of  their  patents  to  the  Indiana  Manufacturing  Co.  Furthermore, 
some  of  them  looked  upon  the  royalty  fee  of  $30  as  unreasonable. 
The  important  Buchanan  patent  was  about  to  expire,  and,  in  Janu- 
ary, 1909,  five  of  the  licensees  refused  to  pay  the  royalties  due  at 
that  time  for  the  use  of  the  Indiana  Manufacturing  Co.'s  patents 
during  1908.  The  disputes  with  these  licensees  resulted  in  the  in- 
stitution of  five  suits  at  law  against  them  by  the  Indiana  company 
to  recover  the  license  fees.  One  of  these  companies  settled  in  full  for 
1908,  but  in  January,  1910,  refused  to  pay  royalties  for  1909,  and  suit 
was  then  started  against  it.  Suits  in  equity  were  also  filed  against 
two  of  the  same  licensees  to  enjoin  them  from  infringing  the  patents 
of  the  Indiana  company  and  from  violation  of  the  conditions  at- 
tached to  their  use  of  the  company's  patents  as  fixed  by  their  license 
contracts.  Practically  the  same  questions  were  raised  in  all  these 
cases.  The  licensees  set  up  the  defense  that  the  license  contract  was 
in  illegal  restraint  of  trade  and  in  violation  of  the  Federal  and  State 
antitrust  laws ;  ^  that  the  Indiana  Manufacturing  Co.  had  given  better 

*  In  this  connection,  the  answer  of  one  of  the  defendants  read,  In  part,  as  follows : 

The  said  contract  [the  license  contract]  ♦  •  •  was  and  is  ♦  *  *  an 
illegal  contract  In  restraint  of  trade  or  commerce  among  the  several  States  and 
with  foreign  nations,  and  was  one  of  numerous  similar  contracts  simultaneously 
entered  into  by  substantially  all  the  manufacturers  and  dealers  in  pneumatic  stackers 
in  the  United  States,  all  of  whom  were  and  are  engaged  in  commerce  among  the 
several  States  including  them,  it  having  been  a  part  of  the  mutual  agreement  when  it 
was  executed  that  it  should  only  take  effect  and  become  operative  when  similar 
contracts  were  executed  by  substantially  all  those  engaged  in  the  business  to  which 
it  relates  among  and  throughout  the  United  States,  that  Is  to  say,  the  business  of 
manufacturing  and  selling  pneumatic  straw  stackers,  this  contract  and  similar  ones 
executed  by  substantially  all  those  engaged  in  such  business  in  the  United  States 
and  among  the  several  States  having  been  devised  and  procured  by  complainant  in 


124 


FARM-MACHINEBY  TBADE  ASSOCIATIONS. 


terms  to  other  licensees  by  way  of  alleged  rebate  or  other  conces- 
sions in  violation  of  a  provision  of  the  license  contract  (the  transac- 
tions with  the  J.  I.  Case  Threshing  Machine  Co.  being  specifically 
referred  to,  as  well  as  certain  alleged  concessions  to  the  International 
Harvester  Co.  of  America,  the  Avery  Manufacturing  Co.,  and  others, 
by  way  of  the  purchase  of  patents),  and  that  better  terms  had  been 
given  to  certain  licensees  in  the  making  of  the  patents  purchase 
agreements  which  were  claimed  to  be  illegal  and  void.  Furthermore, 
the  violation  of  a  law  of  the  State  of  Indiana  requiring  the  filing 
of  copies  of  patents  with  certain  affidavits  when  such  patents  were 
sold,  was  alleged.  The  court  sustained  the  plaintiff's  demurrer  to 
each  of  the  paragraphs  of  the  defendant's  answer  except  that  alleg- 
ing the  grant  of  better  terms  to  other  licensees  by  way  of  the  pur- 
chase of  patents.  The  court  ruled  that  to  make  such  transactions 
with  other  licensees  a  violation  of  the  license  agreement  the  plead- 
ing must  show  that  such  transactions  were  fraudulently  made,  for 
the  purpose  of  giving  concessions  amounting  to  a  reduction  in  the 
royalty.    The  answer  of  the  defendant,  however,  did  not  allege  fraud. 

None  of  the  cases  came  to  an  actual  trial  in  court,  although  deposi- 
tions of  the  officers  of  the  Indiana  Manufacturing  Co.  and  of  the 
Case  company  were  taken,  under  an  agreement  that  all  the  deposi- 
tions could  be  used  in  all  the  suits.  The  suits  were  settled  by  the 
respective  licensees  paying  up  all  royalties  in  full,  each  of  them, 
however,  making  a  new  license  agreement  in  the  form  shown  as 
Exhibit  20,  on  page  299,  and  also  becoming  parties  to  the  patents  pur- 
chase agreement.    Thereupon  the  cases  were  dismissed. 

In  the  settlement  of  these  disputes  a  concession  was  made  in  allow- 
ing the  licensees  a  discount  of  $3  on  each  stacker  from  the  stipulated 
terms  for  cash  payment  of  royalties.  Accordingly,  a  general  letter 
was  sent  to  all  licensees  notifying  them  that  under  the  terms  of  their 


nnrsuance  to  a  combination  and  conspiraCT  for  the  purpose  of  establishing  and 
maintaining  a  monopoly  in  said  business,  and  only  delivered  to  become  effective  when 
Sitered  into  by  a  sufficient  number  thereof  to  establish  and  maintain  such  monopoly 
throughout  the  United  States  Irrespective  of  the  validity  and  legal  effect  of  any 
natente  that  might  remain  In  force  after  the  expiration  of  the  said  Buchanan  patent; 
Sit^mDlainaEt  and  its  predecessor  in  business  The  Farmer's  Friend  Company. 
^wi  &7  about  ten  years,  prior  to  the  execution  of  the  said  contract,  the  owners  of 
S^^hove  m?ntlon^  sSaSan  patent  of  January  19,  1892,  and  a  patent  to  the  same 
BuohaSIn  for  improvements  In  straw-stacking  machines  issued  April  29.  1884. 
Na  297  561  whch  patents  together,  if  valid  to  the  full  extent  of  their  terms,  would, 
-  «T?J:2r  «nd  iiftRir  oatents  secure  while  in  force,  a  lawful  monopoly  in  the  pneu- 
5f«Rc  8ttck??lrt^but^he  expiSn  of  which  would  throw  this  art  open  to  practical 
^mmlrVui    roiJoetition  a   consequent    large   reduction   in   the   selling   price 

♦S?.T^f  f  thP  m^onoDolv  were  not  extended  by  contract  between  the  principal  manu- 
l^®5^^I;i'«f  n^n^Jffic^aSere  In  the  United  States;  that  when  the  inventions 
in^rSfrtine  to^be  c^?^^^^^^  Buchanan  patents  accrued  to  the  public  by  ooera- 

R^T^f  law  it  became  practicable  for  the  various  manufacturers,  without  in^ing- 
JiJ^anv^ldpateXtS  make  and  market  successful  pneumatic  stackers,  serving 
i?if«it  -nthP  nurooses  required  of  such  stackers,  and  to  sell  them  at  a  reasonable 

SLitP'lt* ««  MuSf  to  pe%et?are  sa^C  monopolj  .ftS  the  patents  on  which  It 

ffiMrSiSM-o?sSt.?en^«s?  '^-sjisiof <sf  '^rBuThSS 

patents. 


^^'    L   "^^ 


r.Z 


CONCENTRATION  IN   OWNERSHIP   OF   WIND-STACKER  PATENTS.      125 

contracts  they  would  be  entitled  id  this  discount  in  making  settle- 
ment on  stackers  made  and  sold  during  1911.  They  were  also  noti- 
fied that  in  the  settlement  of  disputes  with  the  licensees  in  question 
the  latter  had  been  given  the  right  to  cancel  the  license  agreement  at 
the  expiration  of  the  Elward  patent,  in  December,  1918,  or  to  con- 
tinue it  until  the  full  end  of  the  terms  of  each  and  all  of  the  patents 
recited  in  the  contract  as  owned  by  the  licensor,  or  any  reissues 
thereof,  or  for  such  shorter  period  as  the  licensee  might  elect,  upon 
the  terms  of  the  license  contract,  or  such  terms  as  might  be  mutually 
agreed  upon.  The  various  licensees  were  requested  to  signify  their 
acceptance  of  these  offers.  These  provisions  are  included  in  the  form 
of  license  contract  now  employed  by  the  Indiana  Manufacturing  Co., 
a  copy  of  which  is  shown  as  Exhibit  20,  on  page  299. 

Section  5.  Significance  of  the  patents  license  system. 

The  purpose  of  the  Indiana  Manufacturing  Co.  to  acquire  com- 
plete domination  over  the  wind-stacker  feature  of  the  thresher  busi*- 
ness  is  shown  in  its  aggressive  efforts  to  acquire  all  desirable  patents 
relating  thereto.  Such  a  policy  was  necessary  to  prevent  litigation 
and  maintain  the  integrity  of  its  license  system.  At  the  present  time 
the  company  owns  or  controls  about  170  distinct  United  States  letters 
patent,  including  virtually  all  those  essential  to  the  operation  of  a 
commercially  successful  wind  stacker.  In  other  w  ords,  it  has  secured 
practical  control  of  the  patents  in  this  line.  Furthermore,  its  posi- 
tion is  strengthened  by  its  control  of  the  Sattley  Stacker  Co.^ 

The  control  of  the  fundamental  Buchanan  patent  in  the  hands  of 
the  Indiana  Manufacturing  Co.  undoubtedly  precluded  an  effective 
concentration  of  wind-stacker  patents  in  other  hands.  Thresher 
manufacturers  early  became  convinced  of  the  absolute  necessity  for 
securing  the  right  to  manufacture  imder  the  Buchanan  patent.    The 

iThe  reasons  for  acquiring  the  patents  controlled  by  the  Sattley  Stacker  Co.  were 
explained  by  the  former  president  of  the  Indiana  Manufacturing  Co.  as  follows : 

The  Sattley  stacker,  while  being  of  the  same  general  construction  of  other  endless 
apron  carriers  and  stackers,  was  an  Improvement  upon  them  to  the  extent  that  It 
was  attached  to  the  separator  and  not  on  separate  trucks,  and  consequently  not 
subject  to  alignment  in  setting;  It  also  had  enclosed  sides  and  top  so  as  to  prevent 
the  straw  from  blowing  away  while  In  operation,  and  it  was  manufactured  by  a 
wealthy  corporation,  who,  in  their  advertisements,  were  taking  advantage  of  the 
oreiudice  still  remaining  among  farmers  and  threshermen  who  were  not  well  dls- 
Dosed  or  unacquainted  with  the  merits  of  the  wind  stacker  proper,  by  advertising  In 
^ade  publications  and  otherwise,  "  Don't  blow  your  money  away  " — intimating  that 
the  wind  stacker  was  wasting  grain.  It,  by  catering  to  the  prejudice,  was  retard- 
ing the  general  use  of  the  wind  stacker  and  costing  the  Indiana  Manufacturing 
Company  about  $30,000  or  $35,000  a  year  to  combat  it.  It  was  also  sold  at  a 
lower  price  which  was  elastic,  and  the  commission  to  agents  or  dealers  was  set  at 
S40-  whereas  the  agent  or  dealer  in  selling  wind  stackers  received  but  $25.  This 
condition  induced  many  dealers  to  talk  the  Sattley  stacker,  and  sell  It  to  customers 
who  would  otherwise  have  bought  wind  stackers.  When,  therefore,  the  owners  of 
the  patents  came  to  us  and  offered  to  put  the  commission  at  $25  and  establish  a 
uniform  price  of  $200  for  their  stacker,  we  thought  the  saving  of  the  expense  and 
advertising,  and  compelling  the  stacker  to  be  sold  on  Its  merits,  and  not  through 
oreiudice,  and  removing  the  inducement  for  agents  to  give  It  the  preference  over 
the  wind  stacker,  were  sufficient  reasons  to  induce  us  to  make  the  arrangement  We 
thought  it  would  result  In  the  diminished  sale  of  the  Sattley  stacker  and  it  had 
that  result;  the  result  being  that  the  sale  of  Sattley  stackers  was  failing  off  and 
tlia  iale  of  wind  stackera  Increasing  from  year  to  year. 


,  * 


126 


FARM-MACHINEBY   TRADE  ASSOCIATIONS. 


It 


acquisition  of  the  Elward  patent  by  the  Indiana  company  rendered 
its  position  still  more  secure.  Under  such  conditions  it  is  not  strange 
that  the  control  of  other  patents  passed  to  the  Indiana  Manufac- 
turing Co. 

A  question  of  great  public  interest  raised  by  the  wind-stacker 
patent  situation  has  already  been  mentioned,  namely,  whether  this 
monopoly  of  patents  is  lawful;  that  is,  whether  it  transcends  the 
monopoly  in  regard  to  specific  patents,  which  the  patent  law  was 
intended  to  create.  The  case  of  the  Indiana  Manufacturing  Co. 
presents  some  phases  distinct  from  the  case  that  would  exist  if  its 
patents  were  vested  in  a  single  threshing-machine  company  which 
refused  to  license  its  competitors.  Although  controlled  through 
stock  ownership  by  the  managing  directors  of  the  J.  I.  Case  Thresh- 
ing Machine  Co.,  the  Indiana  Manufacturing  Co.  itself  is  not  now  a 
manufacturing  company;  it  is  purely  a  patent-holding  company, 
whose  business  relates  almost  solely  to  the  sale  of  the  right  to  manu- 
facture under  its  patents.  It  is  claimed  that  the  right  is  open  to  any 
thresher  manufacturer  who  agrees  to  the  tei-ms  of  the  license  contract, 
including  the  agreement  to  maintain  a  fixed  selling  price.  It  is  not 
shown  that  any  thresher  manufacturer  who  applies  for  a  license  con- 
tract is  required  to  also  execute  one  of  the  patents  purchase  agree- 
ments, but  it  is  clear  that  if  he  does  so  he  is  allowed  a  reduction  in 
the  royalty  rate  under  that  contract.  It  is  also  clear  that  the  patents 
purchase  agreements  tend  to  strengthen  the  monopoly  of  the  Indiana 
Manufacturing  Co.  In  this  connection,  it  should  be  pointed  out  that 
the  profitableness  of  the  business  of  the  Indiana  Manufacturing  Co. 
depends  upon  its  ability  to  control  some  patent  fundamentally  neces- 
sary for  the  successful  operation  of  a  wind  stacker.  The  Buchanan 
patent  was  of  this  character  and  the  same  is  true  of  the  Elward 
patent. 

In  view  of  recent  decisions  of  the  courts,  it  is  also  a  fair  question 
as  to  whether  the  agreement  of  the  licensees  to  maintain  a  imiform 
selling  price  is  lawful.  If,  as  indicated  in  the  footnote  on  pages  123- 
124,  the  continuation  of  the  license  system  after  the  expiration  of  the 
Buchanan  patent  was  due  largely  to  an  agreement  among  the 
thresher  manufacturers  themselves,  it  would  appear  that  such  action 
was  unlawful.  At  any  rate  because  of  the  concentration  of  patents 
in  the  hands  of  the  Indiana  Manufacturing  Co.,  and  the  agreement 
to  maintain  prices,  it  is  obvious  that  the  public  may  be  deprived  of 
the  benefit  of  lower  prices  that  would  naturally  follow  from  the  com- 
petition of  diflferent  manufacturers  producing  noninfringing  devices. 

A  further  phase  of  the  situation  remains  to  be  considered,  namely, 
the  significance  of  the  control  of  the  Indiana  Manufacturing  Co. 
itself  by  the  managing  directors  of  the  J.  I.  Case  Threshing 
Machine  Co.    This  fact  virtually  places  the  control  of  the  wind- 


< 


4  I  f 


CONCENTRATION   IN    OWNERSHIP    OF    WIND-STACKER   PATENTS.      127 

stacker  patent  monopoly  in  the  hands  of  the  Case  company,  although 
it  should  be  pointed  out  that  this  ownership  has  not  produced  any 
noticeable  change  in  the  policy  of  the  Indiana  Manufacturing  Co. 
toward  other  licensees  or  the  public.  It  is  hardly  probable,  how- 
ever, that  the  new  stockholders  would  attempt  to  deprive  licensees 
competing  with  the  Case  company  of  their  rights  under  their  license 
contracts,  or  that  they  would  avail  themselves  of  the  power  to  refuse 
to  enter  into  a  license  contract  with  new  companies  that  might 
attempt  to  enter  the  thresher  trade. 

Attention  should  be  called,  however,  to  the  fact  that  each  licensee 
in  its  royalty  report  to  the  Indiana  Manufacturing  Co.  is  required  to 
furnish  a  list  of  the  names  and  addresses  of  those  to  whom  they  have 
sold  wind  stackers.  (See  Exhibit  22,  p.  305.)  This  requirement 
probably  originated  in  the  effort  of  the  Indiana  Manufacturing  Co. 
to  prevent  the  sale  of  wind  stackers  directly  to  users  at  reduced  prices 
by  allowing  them  the  agent's  commission.  Having  the  name  and 
address,  it  was  comparatively  easy  for  the  Indiana  Manufacturing 
Co.  to  determine  whether  the  customer  was  entitled  to  an  agent's 
commission,  and,  if  not,  to  call  the  licensee  to  account  for  failure  to 
maintain  the  selling  price  fixed  by  the  license  agreement.  With  the 
transfer  of  control  of  the  Indiana  Manufacturing  Co.  this  informa- 
tion apparently  became  available  to  the  directors  of  the  Case  com- 
pany, who  could  thus  secure  information  regarding  the  business  of 
their  competitors  which  none  of  the  latter  would  be  likely  volun- 
tarily to  place  at  the  disposal  either  of  the  Case  company  or  its 

directors. 

Finally,  one  of  the  principal  results  of  the  acquisition  of  control 
of  the  Indiana  Manufacturing  Co.  by  the  directors  of  the  Case  com- 
pany was  to  deprive  the  public  of  any  benefit  that  might  have  come 
from  a  decision  by  the  United  States  Supreme  Court  in  the  suits 
between  these  companies  on  the  question  as  to  whether  the  concentra- 
tion of  patents  relating  to  a  particular  branch  of  the  mechanical 
arts  transcends  the  rights  of  patentees  as  a  combination  in  restraint 
of  trade,  and  whether  the  Indiana  Manufacturing  Co.  is  within  its 
rights  in  requiring  its  licensees  to  maintain  uniform  sale  prices  to 
users.  It  should  be  noted,  moreover,  that  the  patents  purchase  agree- 
ment had  not  been  devised  at  the  time  that  the  Case  suit  was  brought, 
and  consequently  the  court  was  not  called  upon  to  determine  the 
legality  of  this  method  of  inducing  the  various  licensees  to  pool  their 
patents  by  transferring  them  to  the  Indiana  Manufacturing  Co. 


^ 


BESTRIOTION  OF  BETAIL  TBADB  TO  BETAIL  DBALEBS. 


129 


CHAPTER  VI. 

EESTRiCTioir  OF  eetah  trade  to  RETAH  BEAIERS. 

Section  1.  Introdnction. 

The  dealers'  claim  to  the  retail  trade. — ^The  federated  asso- 
ciations of  implement  and  vehicle  dealers  assert  that  manufacturers 
and  wholesalers  who  sell  through  retail  dealers  should  confine  their 
sales  to  that  channel  of  distribution.  Their  position  is  summed 
up  in  the  claim  that  "  to  the  retail  dealer  belongs  the  retail  trade." 
They  assert  that  it  is  not  fair  for  any  manufacturer  or  jobber  who 
sells  through  dealers  also  to  sell  by  any  other  method  of  distribution 
which  threatens  to  impair  or  destroy  the  trade  of  their  dealer- 
customers,  who  have  invested  their  capital  in  the  manufacturers' 
goods  for  the  purposes  of  resale. 

The  forms  of  distribution  to  which  these  retailers'  associations 
are  especially  opposed  are  sales  directly  to  farmers  and  sales  through 
irregular  dealers.  In  this  connection  they  object  to  the  sale  of 
goods  through  farmers'  cooperative  stores  or  through  branch  retail 
stores  controlled  by  the  manufacturer.  They  believe  that  manu- 
facturers and  wholesalers  who  seek  the  trade  of  dealers  should  not 
furnish  a  supply  of  goods  to  mail-order  houses,  and  they  have  been 
engaged  in  a  constant  struggle  to  devise  means  by  which  to  minimize 
the  competition  of  the  mail-order  or  catalogue  house  itself. 

The  same  reason  underlies  the  opposition  to  all  these  forms  of 
distribution  in  which  the  dealer  is  not  a  factor,  namely,  that  such 
sales  tend  to  impair  the  profitableness  of  the  retail  business.  Fur- 
thermore, the  dealers  are  opposed  to  legislation  authorizing  any 
State  to  engage  in  the  manufacture  of  any  kind  of  farm  machinery 
or  accessories  at  penal  institutions,  because  of  the  fact  that  the 
output  of  such  factories  is  usually  sold  at  prices  below  those  charged 
for  goods  made  at  factories  emplopng  free  labor,  which  are  sold 

by  dealers. 

To  support  their  claim  that  "  to  the  retail  dealer  belongs  the  retail 
trade,"  the  dealers  contend  that  any  economy  in  distributing  ex- 
penses that  may  be  effected  by  the  methods  objected  to  is  more  than 
offset  by  the  loss  in  service  to  the  farmer  on  the  one  hand  and  to 
the  manufacturer  and  wholesaler  on  the  other.  The  dealers  assert 
that  they  .offer  a  service  to  the  farmer  in  setting  up  and  operating 
128 


n/ 


machines,  in  providing  repairs  quickly,  and  in  the  selling  of  goods 
on  credit,  that  is  greatly  superior  to  that  offered  by  any  other  plan 
of  distribution.  They  further  assert  that  the  sale  of  goods  through 
dealers  is  more  economical  and  satisfactory  to  manufacturers  and 
wholesalers. 

Most  manufacturers  and  wholesalers  of  farm  machinery  have  vol- 
untarily adopted  the  plan  of  selling  through  dealers,  a  fact  which 
has  been  of  much  importance  to  the  organized  dealers  in  efforts 
to  secure  the  manufacturers'  cooperation  in  confining  sales  of  their 
products  to  sales  made  through  the  retailers.  At  the  same  time  the 
dealers  have  also  found  that  some  manufacturers  and  wholesalers 
protect  the  dealers  only  because  they  feel  compelled  to  do  so. 

The  desire  for  protection  against  such  competition  was  the  chief 
cause  for  the  organization  of  dealers'  associations  which  took  place 
in  the  late  eighties  and  early  nineties.  From  the  standpoint  of  the 
dealer  the  situation  was  acute.  One  of  the  leading  implement  trade 
papers  claimed  that  manufacturers  had  been  too  free  in  dealing 
directly  with  farmers  and  in  placing  their  goods  on  sale  with  irreg- 
ular agents,  but  it  was  alleged  that  the  manufacturers  were  waking 
up  to  the  importance  of  dealing  "  more  frankly  with  the  local  deal- 
ers." It  was  pointed  out  that  something  was  wanted  that  would  put 
the  business  on  a  more  solid  basis ;  something  that  would  relieve  the 
"  overcrowding  and  weed  out  the  irresponsible  agents  who  sold  on 
commission,"  and  put  a  check  on  the  manufacturer  or  jobber  who 
exhibited  a  weakness  for  selling  to  farmers  at  wholesale  prices.  To 
remedy  the  situation  the  dealers  were  urged  to  organize  for  system- 
atic cooperation  with  the  manufacturers. 

Shortly  after  the  Kansas  dealers'  association  was  formed,  in  1889 
(see  p.  9),  a  committee  of  its  members  was  appointed  to  confer  with 
the  Kansas  City  Implement  Dealers'  Association,  as  the  implement 
jobbers'  club  was  then  known,  in  order  to  protest  against  retail  sales 
by  the  jobbers  at  wholesale  prices.  It  was  reported  that  this  protest 
was  favorably  received  by  the  jobbers  and  that  the  members  of  the 
dealers'  association  agreed  to  patronize  jobbing  houses  who  afforded 
such  protection.  In  1892  the  members  of  the  Western  association 
pledged  themselves  to  report  to  the  secretary  of  the  association  all  job- 
bers and  manufacturers  who  sold  directly  to  farmers  or  to  persons  not 
regularly  in  the  implement  trade.  It  was  made  the  duty  of  the  sec- 
retary to  take  such  reports  up  by  correspondence  and  adjust  them  to 
the  satisfaction  of  the  dealers  making  the  complaint.  In  case  the 
offending  jobber  or  manufacturer  refused  to  comply  with  the  requests 
of  the  dealers,  the  entire  correspondence  was  to  be  submitted  to  the 
board  of  directors  for  report  at  the  next  regular  meeting  of  the 
association.  This  plan  seems  to  have  been  the  one  that  was  adopted 
at  that  time  by  most  of  the  dealers'  associations.  In  January,  1896, 
68248"— 16 8 


130 


FARM-MACHINEEY  TRADE  ASSOCIATIONS. 


EESTBIOTION   OF  RETAIL  TBADE   TO  BETAIL  DEALERS. 


131 


I 


the  members  of  the  Western  association  adopted  the  following  reso- 
lution : 

Resolved,  That  we  should  pledge  our  support  and  patrona^ 
to  none  who  will  not  in  turn  use  their  utmost  endeavor  to  merit 
our  good  offices  by  refusing  to  sell  to  any  person  who  is  not  a 
l^tunate  dealer  in  the  retail  implement  busmess,  and  that  those 
who  continue  persistently  to  sell  to  other  than  legitimate  dealers 
shall  be  placed  under  the  ban  of  this  association. 

To  assist  manufacturers  and  jobbers  in  distinguishing  between 
regular  and  irregular  dealers,  the  retailers'  associations  found  it  nec- 
essary to  decide  what  qualifications  should  be  taken  to  constitute  a 
regular  dealer.  A  definition  of  this  sort,  adopted  by  dealers'  asso- 
ciations in  Nebraska  and  North  Dakota  in  1895,  was  as  follows : 

Any  person  who  is  engaged  in  retailing  implements  or  vehicles, 
who  carries  at  all  times  a  stock  of  implements,  or  vehicles,  ade- 
quate to  the  wants  of  the  community,  and  who  may  regularly 
maintain  an  office  as  an  implement  or  vehicle  dealer,  and  keep 
the  same  open  at  proper  business  hours,  will  be  considered  a 
dealer  imder  this  article. 

The  minutes  of  the  Western  association  show  that  during  1895, 

1896,  and  189Y  complaints  were  freely  discussed  among  its  members, 
and  in  1896  this  association  began  the  publication  of  an  official  bulle- 
tin known  as  the  Implement  Dealers'  Bulletin.  Announcement  was 
made  that  it  would  be  the  policy  of  the  Bulletin  to  labor  for  the 
protection  of  regular  dealers  from  the  encroachment  of  "illegiti- 
mate" ones.  One  of  the  regular  features  of  the  Bulletin  was  the 
publication  of  a  summary  of  complaints  of  direct  and  irregular 
sales,  but  the  names  of  the  parties  were  not  usually  given.  Commu- 
nications published  in  the  Bulletin  urged  members  with  complaints 
to  come  to  the  convention  of  the  Western  association  in  January, 

1897,  prepared  to  make  a  strong  case  against  any  guilty  party,  with 
all  the  facts  in  concrete  form,  so  that  no  time  would  be  lost  in  pre- 
senting them  to  the  meeting.  A  little  later  the  Bulletin  stated  that 
it  was  about  time  an  example  was  made  of  some  of  the  offenders 
and  that  dealers  knew  their  duty  toward  houses  that  persisted  in 
ignoring  their  rights.  In  May,  1897,  an  editorial  in  the  Bulletin, 
after  expressing  a  belief  that  there  were  too  many  factories  making 
implements  and  vehicles,  went  on  to  advocate  an  agreement  by  the 
manufacturers  and  jobbers  to  protect  the  legitimate  dealers,  to  sell 
no  goods  at  retail,  and  to  establish  no  agencies  with  parties  who  were 
not  regular  dealers.  This,  it  was  said,  would  work  no  hardship 
upon  any  manufacturer  or  jobber,  and  dealers  were  urged  to  bend  all 
their  energies  to  this  end,  which  it  was  thought  could  be  done  only 
by  associated  effort. 


^ 


¥> 


During  the  nineties  the  practice  of  harvesting-machine  manufac- 
turers in  placing  agencies  with  irregular  dealers  was  repeatedly  con- 
demned by  the  dealers'  associations.  An  editorial  in  the  Bulletin  in 
October,  1899,  stated  that  the  manufacturers  of  harvesting  ma- 
chinery had  made  agency  contracts  with  liverymen,  blacksmiths, 
farmers,  and  others,  and  that  these  irregular  dealers  "rarely  ever 
sell  more  than  a  sample  *  ♦  *  but  they  are  harassing  to  the 
regular  dealer  and  cause  him  no  end  of  annoyance  during  the  season." 

The  Bulletin,  in  commenting  upon  the  situation  in  the  early  part 
of  1900,  made  the  following  statement: 

We  do  not  concede  the  right  to  a  plow  manufacturer  to  place 
an  agency  with  any  one  not  a  dealer  in  implements  just  because 
he  can  get  no  regular  dealer  in  that  line  to  represent  him;  then 
why  should  the  privilege  be  accorded  to  the  manufacturer  of 
harvesting  machmes  ?  *  *  *  It  is  an  utter  impossibility 
for  one  dealer  to  represent  several  harvesting  machines  success- 
fully, and  no  town  has  enough  dealers  to  represent  all  machines. 
The  position  dealers  take  is  just  this:  that  if  a  company  can  not 
get  representatives  through  the  regular  channels,  it  would  better 
move  on  to  the  next  town  where  it  can. 

By  this  time  the  agitation  against  direct  and  irregular  sales  had 
become  general,  and  associations  of  implement  and  vehicle  dealers 
had  been  organized  in  most  of  the  States  in  the  Middle  West.  It 
was  felt  that  the  only  way  in  which  satisfactory  relations  between 
the  dealers  on  the  one  side  and  manufacturers  and  jobbers  on  the 
other  could  be  maintained  was  for  the  latter  to  do  a  strictly  whole- 
sale business  and  for  the  dealers  to  show  their  appreciation  by  giving 
such  manufacturers  and  jobbers  their  trade.  The  question  had  also 
been  raised  whether  a  manufacturer  or  jobber  should  sell  goods  at 
retail  at  places  where  he  had  no  agent  and  no  prospect  of  securing 
one.  Various  views  were  expressed.  In  this  connection,  the  secre- 
tary of  the  Western  association  in  a  report  read  at  an  executive 
session  of  the  members  of  the  Western  association  in  January,  1898, 
made  the  following  statement : 

In  too  many  instances  it  is  claimed  that  they  had  a  perfect 
right  to  make  the  sales  for  the  reason  that  they  had  no  customer 
in  the  towns  to  which  the  goods  were  shipped,  and  our  members 
should  not  complain  because  they  had  maintained  a  fair  retail 

Erice,  when  in  fact  the  margin  over  the  wholesale  price  was  not 
alf  what  the  worst  price  cutter  would  consider  a  fair  profit, 
and  they  invariably  refuse  to  pay  the  complainant  a  commission 
because  he  is  not  their  customer  and  has  no  right  to  demand  it. 
As  long  as  such  practice  is  kept  up  just  so  long  will  the  business 
be  demoralized. 

The  consideration  of  complaints  against  individual  manufacturers 
and  jobbers  who  were  alleged  to  have  made  direct  sales  or  sales 


132 


FABM-MAOmNEBY  TEADE  AS800IATI0NB. 


BESTEICTION   OF  BBTAIL  TBADE   TO  RETAIL  DEALERS. 


133 


r 


through  irregular  agents  occupied  much  of  the  time  of  the  dealers' 
associations.    Almost  from  the  beginning  it  became  customary  for 
the  secretary  of  the  Western  association  in  his  report  to  members 
at  the  annual  conventions  to  summarize  the  complaints  that  had 
been  filed  during  the  preceding  year  and  state  what  disposition  had 
been  made  of  them.    As  already  pointed  out,  it  was  his  duty  to 
secure  an  amicable  adjustment  of  complaints,  generally  by  collect- 
ing from  the  manufacturer  or  wholesaler  complained  of  a  com- 
mission on  the  sale  for  the  complaining  dealer,  and  by  securing  a 
promise  that  future  sales  would  be  confined  to  regular  dealers.    At 
the  annual  convention  of  the  Western  association  in  January,  1899, 
nearly  all  the  members  present  stood  up  when  those  who  had  been  ■ 
benefited  by  receiving  commissions  on  goods  sold  in  their  territory 
and  by  the  discontinuance  of  irregular  agencies  were  asked  to  rise. 
At  this  convention  a  section  of  the  by-laws,  which  provided  that  20 
per  cent  of  all  commissions  collected  for  the  members  should  be  paid 
into  the  treasury  of  the  association,  was  eliminated  by  unanimous 
vote  of  the  members. 

The  dealers  finally  became  convinced  that  the  situation  could  only 
be  handled  through  the  combined  influence  of  the  several  State  and 
interstate  associations  of  dealers.  Plans  were  accordingly  made  for  a 
meeting  at  Chicago  to  confer  with  the  harvesting-machine  manu- 
facturers and  to  form  a  federation  of  the  various  dealers'  associa- 
tions. In  September,  1900,  the  federation  was  formed  as  planned, 
several  of  the  most  important  dealers'  associations  being  represented. 

(Seep.  10.)  . 

Negotiations  with  harvesting  machine  cjompanibs.— During 
the  first  few  years  following  the  organization  of  the  Federation  its 
activities  largely  centered  in  efforts  to  induce  the  harvesting-machine 
manufacturers  not  to  place  agencies  with  persons  whom  the  dealers 
did  not  consider  to  be  implement  dealers.  A  careful  record  was  kept 
of  all  complaints  filed  against  harvester  companies.  Some  of  the 
harvesting-machine  manufacturers  were  reported  to  have  assured 
dealers  that  they  were  in  full  accord  with  them,  but  the  harvester 
committee  of  the  Federation  was  apparently  unable  to  induce  the 
International  Harvester  Co.  to  assent  to  confining  its  trade  to  regular 
dealers.  In  November,  1904,  however,  it  was  reported  that  at  a 
conference  held  between  the  harvester  committee  of  the  Federation 
and  representatives  of  the  International  Harvester  Co.  of  America 
the  dealers  again  requested  that  the  latter  market  its  product  only 
through  regular  retail  implement  dealers,  to  which  the  company 
answered  that  it  was  heartily  in  accord  with  the  proposition  and  had 
taken  favorable  action  on  75  per  cent  of  the  reports  of  irregular 
agencies  furnished  by  the  Federation  the  year  before,  and  also,  on  its 


w 


^ 


own  motion,  had  taken  similar  action  on  many  other  cases  not 
reported. 

The  report  of  the  harvester  committee  read  at  the  convention  of 
the  Western  association  in  January,  1905,  stated  that  efforts  had  been 
focused  on  the  single  point  of  trying  to  induce  the  International 
Harvester  Co.  to  confine  the  trade  in  harvesting  machinery  ex- 
clusively to  the  regular  retail  implement  dealers,  but  that  the  com- 
mittee had  not  been  successful  in  getting  the  International  Harvester 
Co.  to  declare  itself  positively  upon  this  point.  Substantial  progress 
had  been  made,  however,  in  the  discontinuance  of  over  200  objection- 
able agencies  since  the  report  of  the  committee  at  the  preceding 
convention. 

Section  2.  Cooperation  between  federated  dealers  and  organized  manu- 
facturers. 

Establishment  of  harmonious  relations  between  dealers'  and 
manufacturers'  organizations. — Efforts  of  the  dealers'  associations 
to  enlist  the  assistance  of  jobbers'  and  manufacturers'  organizations 
in  confining  trade  to  regular  dealers  met  with  a  considerable  degree 
of  success.  The  officers  and  directors  of  the  Western  association  con- 
tinued their  efforts  to  enlist  the  assistance  of  the  Kansas  City  job- 
bers' club  in  devising  some  plan  by  which  direct  sales  through  irregu- 
lar dealers  could  be  discontinued.  During  the  middle  nineties,  how- 
ever, the  jobbers'  club  refused  to  amend  its  by-laws  to  provide  that 
members  should  be  bound  to  live  up  to  any  agreement  that  might  be 
made  with  the  dealers.  The  jobbers  took  the  position  that  the 
dealer  and  the  jobber  should  adjust  any  grievance  between  them- 
selves without  the  assistance  of  either  of  the  two  organizations. 
Some  of  the  jobbing  houses,  however,  announced  that  they  had 
adopted  a  policy  of  selling  no  goods  at  retail. 

Efforts  were  made  to  enlist  the  assistance  of  the  manufacturers 
belonging  to  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers.  The  secretary  of  the  Western  association, 
in  addressing  the  convention  of  the  manufacturers  held  in  October, 
1895,  requested  them  to  take  some  action  to  show  to  the  dealers  that 
it  was  their  policy  and  purpose  to  protect  the  regular  legitimate 
dealer  and,  if  practicable,  to  appoint  a  committee  to  which  the 
complaints  of  the  dealers'  associations  could  be  referred.  A  few 
months  later  the  executive  committee  of  the  National  Association 
of  Agricultural  Implement  &  Vehicle  Manufacturers  adopted  a  reso- 
lution expressing  the  sympathy  of  their  association  with  all  retail 
dealers'  associations  in  their  efforts  to  protect  the  regular  legitimate 
dealer  in  his  trade  in  every  way  practicable,  and  the  dealers'  associa- 
tions were  invited  to  send  complaints  of  this  character  to  the  execu- 


#^ 


134 


FAEM-MACHINEEY  TRADE  ASSOOIATIOISra. 


BESTRICTION  OF  BETAIL  l^RADE  TO  RETAIL  DEALERS. 


135 


live  committee  of  the  manufacturers'  association,  and  that  committee 
was  instructed  to  give  such  complaints  due  consideration. 

Further  progress  was  made  in  January,  1900,  at  the  annual  con- 
vention of  the  Western  association,  at  which  it  was  reported  that 
a  resolution  had  been  agreed  upon  by  a  conference  of  committees 
representing  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers,  the  Carriage  Builders'  National  Association, 
the  Kansas  City  Implement,  Vehicle  &  Hardware  Club,  and  the 
Western  Retail  Implement  &  Vehicle  Dealers'  Association.  This 
was  to  the  effect  that — 

It  is  the  sense  of  this  conference  of  committees  that  we  recom- 
mend that  manufacturers  abstain  from  selling  goods  to  cata- 
logue houses  and  confine  their  business  to  sellingtheir  goods  to 
jobbers  and  retail  dealers;  ♦  *  ♦  that  the  Western  Retail 
Implement  Dealers'  Association  take  such  action  as  will  be 
necessary  to  furnish  the  manufacturers'  and  jobbers'  associations 
with  a  correct  list  of  the  legitimate  retail  implement  and 
vehicle  dealers  in  the  territory  covered  by  said  association,  for 
the  purpose  of  enabling  the  manufacturers  and  jobbers  to  fur- 
nish catalogues  and  prices  to  legitimate  dealers  only. 

The  Bulletin  expressed  the  hope  that  favorable  action  would  be 
taken  upon  this  resolution  by  the  manufacturers'  and  jobbers'  asso 
ciations,  and  a  committee  was  appointed  to  carry  out  the  spirit  of 
the  resolution. 

Shortly  after  the  formation  of  the  Federation,  in  1900,  the  Na- 
tional Association  of  Agricultural  Implement  &  Vehicle  Manufac- 
turers created  a  standing  committee  on  dealers'  associations  to  con- 
sider all  questions  of  mutual  interest.  It  was  arranged  that  one 
or  more  members  of  the  committee  should  visit  officially  all  meet- 
ings of  dealers'  associations  which  they  thought  advisable,  confer 
with  such  meetings  in  any  manner  they  thought  proper,  and  make 
a  report  of  the  conference  to  the  executive  committee  of  the  manu- 
facturers' association.  In  the  latter  part  of  1901  this  committee 
reported  that  members  had  visited  meetings  of  the  Iowa,  Nebraska, 
and  South  Dakota  dealers'  associations,  and  that  the  full  committee 
had  visited  the  meeting  of  the  Western  association.  The  report  con- 
tinued a^  follows: 

We  believe  in  encouraging  these  associations  •  •  •  and 
helping  them  along  in  every  way  we  can.  *  *  *  Our  inter- 
ests are  too  closely  connected  to  permit  of  anythmg  but  the  most 
harmonious  relations. 

mrectoriei  of  regular  dealers,— ks  an  aid  to  the  manufacturers 
and  jobbers  in  determining  whether  prospective  customers  were  enti- 
tled to  consideration  as  regular  dealers,  and,  apparently  as  a  result  of 
the  resolution  of  the  committees  mentioned  above,  the  Western  asso- 


4v 


i» 


ciation  in  1901  began  the  annual  publication  of  a  list  of  regular 
dealers  at  towns  where  that  association  had  members,  and  in  1902 

^  also  inaugurated  a  movement  to  enlist  the  assistance  of  the  manu- 

facturers and  jobbers  in  securing  stricter  classification  of  implement 
and  vehicle  dealers  by  the  conmiercial  agencies.  The  directory  of 
the  Western  association  was  favorably  received  by  the  members  of 
the  National  Association  of  Agricultural  Implement  &  Vehicle 
Manufacturers,  the  secretary  in  1901  being  instructed  to  furnish  each 

A  member  with  a  copy  with  the  recommendation  that  at  the  towns  listed 

manufacturers  should  confine  their  sales  to  the  legitimate  dealers 
named  in  the  list.  This  list  was  also  placed  in  the  hands  of  the  Kan- 
%  sas  City  jobbers.  In  1907  this  plan  of  keeping  goods  out  of  the  hands 
of  irregular  dealers  was  reported  to  be  working  well.  The  Western 
association  has  continued  to  issue  this  directory  annually  to  the  pres- 

m  ent  time,  and  they  have  also  been  issued  by  other  State  associations, 

including  the  Tri- State  association  (covering  Ohio,  Kentucky,  and 
Indiana)  and  the  Texas  association. 

Commercial  agency  reports. — ^The  movement  started  at  the  con- 
vention of  the  Western  association  in  January,  1902,  to  secure  a  bet- 
ter classification  of  implement  and  vehicle  dealers  by  the  commer- 
cial agencies  so  that  catalogue  agents  should  not  be  classed  as  dealers, 
was  taken  up  by  the  National  Association  of  Agricultural  Implement 
&  Vehicle  Manufacturers  at  its  convention  in  1903.  Its  committee 
on  dealers'  associations  recommended  that  the  members  of  the  manu- 
facturers' association  address  letters  to  all  the  commercial  agencies 
to  which  they  were  subscribers,  urging  a  more  definite  classification 
of  "regular"  implement  and  vehicle  dealers,  regular  dealers  being 
used  by  the  manufacturers  as  defined  by  the  dealers'  associations, 
namely,  a  dealer  who  had  a  regularly  established  place  of  business 
and  who  carried  a  stock  of  goods  commensurate  with  the  trade  of 
his  vicinity.    ITiis  recommendation  was  adopted. 

The  conmiercial  agencies,  however,  do  not  appear  to  have  made 
these  changes,  for  the  request  of  the  dealers  to  the  manufacturers 
was  renewed  a  few  years  later.  It  was  explained  to  the  committee 
of  the  manufacturers'  association  that  the  earlier  request  had  been 
favorably  received  by  the  manufacturers,  who  had  obtained  assur- 
ances that  the  lists  would  be  so  revised. 

At  the  conference  of  the  manufacturers'  committee  on  dealers' 
associations  with  the  Federation  in  October,  1908,  the  dealers  re- 
ported that  many  of  those  still  listed  as  implement  dealers  by  the 
commercial  agencies  were  not  dealers,  and  they  asked  the  help  of  the 
manufacturers  in  getting  the  commercial  agencies  to  correctly  classify 
the  dealers.  This  request  was  brought  up  at  a  later  meeting  of  the 
executive  committee  of  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers  and  referred  to  its  committee 


136 


FAKM-MACHINERY  TBADB  ASSOOIATfONB. 


on  dealers'  associations.    The  records  do  not  show  whether  this 
effort  was  successful. 

Conferences  between  representatives  of  dealers^  and  numufac- 
imrers^  organizations, — ^After  the  formation  of  the  Federation  the 
holding  of  conferences  became  a  characteristic  feature  of  associa- 
tion work,  especially  those  held  between  the  committee  on  dealers' 
associations  of  the  National  Association  of  Agricultural  Implement 
&  Vehicle  Manufacturers  on  the  one  hand  and  committees  of  the 
Western  association  and  the  National  Federation  on  the  other. 
Eepresentatives  of  the  manufacturers'  association  continued  (see 
p.  134)  to  attend  meetings  of  the  dealers'  association,  and  in  August, 
1907,  the  Implement  Dealers*  Bulletin  stated  that  the  work  of  the 
organized  dealers  was  in  harmony  with  those  manufacturers  who 
recognized  the  necessity  of  the  retail  dealer  as  the  proper  and 
economical  distributor  of  their  products.  The  members  of  the  Na- 
tional Association  of  Agricultural  Implement  &  Vehicle  Manufac- 
turers were  already  committed  to  this  proposition,  and  it  was  an  un- 
written qualification  for  membership  in  the  National  Plow  Associa- 
tion (organized  in  1907)  that  sales  should  be  confined  to  the  retail 

trade. 

When  the  National  Federation  met  in  October,  1908,  the  delegates 
determined  to  secure  some  kind  of  a  reform  in  a  systematic  way  to 
obtain  a  larger  measure  of  protection  for  their  members.  To  bring 
about  a  better  understanding  with  the  manufacturers,  it  was  decided 
that  the  executive  committee  of  the  Federation  should  act  in  conjunc- 
tion with  a  committee  of  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers  as  a  joint  committee  to  consider 
matters  of  common  interest. 

The  joint  board  held  a  conference  at  that  time,  at  which  the  dealers 
requested  the  help  of  the  manufacturers  in  abolishing  commission 
contracts,  which  they  believed  to  be  the  cause  of  many  irresponsible 
parties  being  furnished  with  goods  on  consignment  to  the  detriment 
of  the  regular  dealers.*  The  matter  of  direct  sales  to  farmers  was 
also  discussed,  especially  of  the  kinds  of  farm  machinery  that  dealers 
do  not  ordinarily  carry  in  stock,  namely,  threshers,  power  com  shell- 
ers,  hay  presses,  and  other  large  machines.  No  definite  conclusion, 
however,-  seems  to  have  been  reached  in  this  matter.  The  results  of 
this  conference  were  reported  to  the  convention  of  the  manufac- 
turers' association  held  a  little  later.    In  making  his  report  the 

^In  this  connection,  the  Federation  at  its  meeting  In  1909  adopted  the  followlnff 
resolution : 

The  commission  contract  stUl  used  by  certain  manufacturers  and  jobbers  with 
dealers  not  worthy  of  credit  Is  placing  dealers  with  capital  Invested  at  a  great  dls- 
advantage.  U  Is  evident  that  this  condition  Is  responsible  In  no  small  degree  for 
the  continued  use  of  canvassers.  ^      .       ^  .         . 

Therefore  he  it  resolved.  That  the  commission  contract  and  carrying  clause  are 
trade  abuses  which  should  be  eliminated. 


/ 


BESTBIOTION  OF  RETAIL  TBADB  TO  EBTAIL  DEALERS.     137 

chairman  of  the  committee  on  dealers'  associations  made  the  follow- 
ing statement : 

In  our  intercourse  with  the  dealers  individually,  and  with 
their  oflficers  and  committees,  both  in  the  State  associations  and 
in  the  general  Federation  of  Dealers'  Associations,  we  are  very 
glad  to  report  we  have  found  them,  almost  without  an  exception, 
disposed  to  be  reasonable,  at  least  from  their  point  of  view. 
Their  requests  may  not  always  accord  with  our  own  ideas,  but, 
if  not,  they  are  willing  to  talk  about  it,  and  if  we  think  their 
reque^s  are  too  strong  they  are  willing  to  modify  them,  and  we 
also  believe  they  would  be  equally  fair  and  reasonable  about  any 
requests  we  may  think  best  to  make  of  them,  for,  when  it  comes 
down  to  a  fijial  analysis,  the  interests  of  the  dealer,  jobber  and 
factory  are  mutual  and  identical,  and  it  is  our  opinion  that  all 
parties  in  this  trade  have  already  realized  this  fact,  and  are 
willing  in  a  great  measure,  to  pull  together  for  the  mutual  benefit 
of  all. 

These  matters  were  among  the  subjects  considered  at  a  meeting 
of  the  executive  committee  of  the  National  Association  of  Agricul- 
tural Implement  &  Vehicle  Manufacturers  held  November  13,  1908. 
This  committee  referred  the  matter  of  abolishing  consignment  con- 
tracts to  the  association's  committee  on  dealers'  associations. 

The  immediate  cause  of  the  appointment  of  the  joint  committee 
seems  to  have  been  the  unsatisfactory  conditions  existing  in  the  sale 
of  manure  spreaders.  The  manufacturers  of  spreaders  belonging  to 
the  National  Association  of  Agricultural  Implement  &  Vehicle 
Manufacturers  had  already  organized  a  subcommittee  of  that  asso- 
ciation, and  a  conference  was  held  with  the  dealers  at  the  convention 
of  the  Western  association  in  January,  1909.  The  dealers  were  rep- 
resented by  the  boards  of  directors  of  the  Western  and  the  Iowa 
asociations,  and  eight  of  the  principal  spreader  companies  had  rep- 
resentatives present.  Resolutions  were  adopted  to  the  effect  that 
manufacturers  and  jobbers  should  discontinue  all  sales  of  spreaders 
directly  to  user,  that  each  dealer  should  have  sufficient  exclusive  terri- 
tory, that  spreaders  should  not  be  sold  to  dealers  on  a  consignment 
contract,  and  that  dealers  should  discontinue  the  use  of  canvassers 
furnished  by  the  manufacturer  or  jobber. 

The  lack  of  protection  given  dealers  by  manufacturers  and  job- 
bers on  manure  spreaders  was  again  taken  up  in  the  Bulletin  in 
May,  1910.  This  article  stated  that  reports  were  coming  in  from 
some  localities  of  the  complete  demoralization  of  the  spreader  busi- 
ness and  that  it  had  been  somewhat  difficult  to  locate  the  ones  most 
to  blame.  It  was  thought,  however,  that  the  practice  of  certain 
manufacturers  in  selling  directly  at  little,  if  any,  above  the  net  price 
to  dealers  was  undoubtedly  the  most  prolific  source  of  trouble. 
To  arrive  at  the  facts  the  members  of  the  constituent  associations  of 


138 


FARM-MACmNBEY  TRADE  ASSOCIATIONS. 


the  Federation  were  asked  to  forward  to  the  secretaries  of  their  re- 
spective associations  answers  to  certain  questions  as  to  the  makes 
nnd  prices  of  spreaders  sold  at  their  towns;  whether  manufacturers 
and  jobbers  were  selling  directly  there,  and  whether  mail-order 
houses  were  getting  any  of  the  business.  The  article  concluded  as 
follows : 

The  first  step  in  bettering  conditions  in  this  line  is  to  secure 

the  data ;  this  the  members  must  furnish.    Will  you  do  your  part, 

and  do  it  now? 

A  conference  with  representatives  of  the  windmill  and  pump 
houses  was  held  at  a  meeting  of  the  directors  of  the  Western  asso- 
ciation in  September,  1909,  and  the  subject  of  better  protection  in 
those  lines  was  thoroughly  discussed,  but  the  results  are  not  reported. 

Opposition  to  manufacturers'  branch  retail  stores. — ^Toward 
the  latter  part  of  1908  implement  dealers  in  Iowa  became  alarmed 
by  the  threatened  competition  of  a  number  of  branch  retail  stores 
that  were  being  established  in  the  western  part  of  that  State  by  cer- 
tain wholesale  interests  for  the  purpose  of  retailing  their  own  goods. 
The  delegates  to  the  meeting  of  the  Federation  in  October,  1908, 
were  unanimous  in  condemning  this  practice,  and  voted  as  the  sense 
of  the  FederaticMi  that  no  manufacturer  seeking  the  dealers'  trade 
and  no  jobber  should  be  interested  in  retailing  implements  and  ve- 
hicles in  any  way. 

The  matter  of  branch  retail  stores  had  been  taken  up  several  years 
earlier  by  the  National  Federation  on  complaint  of  the  implement 
dealers'  association  of  Texas  in  1901.  At  that  time  the  manufacturer 
ccHnplained  of  appeared  before  the  Federation  delegates  to  give 
assurances  that  it  was  not  the  policy  of  his  company  to  antagonize 
the  dealers  and  promised  to  see  that  the  matter  was  thoroughly 
investigated.  According  to  the  Federation  minutes  in  1902,  the  Texas 
case  was  practically  adjusted,  as  the  manufacturer  had  given  orders 
to  close  all  of  the  branch  houses,  except  transfer  houses,  as  rapidly  as 
possible.  This  action  in  closing  these  houses  was  attributed  by  a 
trade  paper  to  the  influence  of  the  Federation. 

In  1908,  several  branch  retail  stores  had  been  opened  in  western 
Iowa  by  one  of  the  largest  plow  manufacturers  in  the  United  States, 
and  also  by  a  prominent  Omaha  jobbing  house.  The  dealers  re- 
quested the  discontinuance  of  these  stores.  One  of  the  leading  imple- 
ment trade  papers,  which  quite  naturally  took  the  dealers'  point  of 
view,  <xHiceded  that  such  stores  would  be  obliged  to  bear  the  same 
i«nt,  taxes,  insurance,  and  other  expenses  as  the  independent  dealer, 
but  pointed  out  that  it  was  claimed  that  the  branch  retail  stores  re- 
ceived inside  prices  and,  furthermore,  that  the  manufacturer  would 
be  satisfied  if  he  realized  the  same  profit  that  he  would  on  goods  fur- 
nished to  the  regular  dealer. 


# 


^ 


BBSTRIOTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS.  139 

The  Bulletin  for  November,  1908,  characterized  the  conditions 
confronting  the  Iowa  dealers  as  the  gravest  that  they  had  faced  since 
the  organization  of  the  retail  implement  dealers. 

The  following  resolution  had  been  adopted  at  the  annual  meeting 
of  the  Federation  in  October,  1908 : 

It  being  rumored  that  certain  manufacturers  of  farm  imple- 
ments are  contemplating  the  establishment  of  retail  branch 
houses  for  the  sale  of  their  products,  we  recommend  that  the 
Federation  go  on  record  as  absolutely  opposed  to  the  retailing 
of  goods  directly  or  indirectly  by  jobbers  or  manufacturers. 

The  Federation  made  this  subject  one  of  the  principal  matters  of 
discussion  at  its  meeting  in  October,  1909,  and  adopted  a  resolution 
denouncing  such  a  system  as  "unfair,  unwise  and  unbusinesslike," 
and  expressed  the  belief  that,  if  continued,  it  meant  "  the  disruption 
of  trade  relations  and  the  elimination  of  the  retail  dealer  and  his 
best  friend— the  smaller  manufacturer."  It  was  voted  to  refer  the 
matter  to  the  joint  arbitration  committee  of  the  manufacturers'  asso- 
ciation and  the  Federation.  The  matter  was  discussed  in  conference, 
and  it  was  decided  to  consider  the  matter  further  during  the  conven- 
tion of  the  manufacturers'  association  to  be  held  a  little  later,  when 
the  companies  complained  of  would  be  invited  to  be  present.  When 
this  meeting  was  held,  the  position  taken  by  the  company  especially 
complained  of  was  that  the  branch  stores  were  private  enterprises  of 
their  manager  at  Omaha.  No  formal  action  was  taken  by  the  com- 
mittee. The  members  of  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers,  however,  adopted  the  follow- 
ing resolution: 

Whereas,  the  establishment  by  manufacturers  of  branch  stores 
for  the  purpose  of  retailing  their  own  goods  would  mean  finally, 
the  disruption  of  trade  relations  and  the  elimination  of  the  re- 
tail dealer;  be  it 

Resolved,  That  we  are  opposed  to  the  establishment  of  such 
houses,  believing  that  "to  the  retail  dealer  belongs  the  retail 
trade." 
Shortly  after  the  Federation  meeting  the  secretary  wrote  one  of 
the  prominent  members  of  the  Western  association  that  he  was  in 
receipt  of  information  that  the  plow  company  in  question  was  also 
establishing  retail  branches  in  Portland  (Oreg.)  territory,  and  there 
were  also  a  few  in  Kansas  and  Oklahoma,  which,  he  stated,  were 
big  concerns.    A  few  days  later  the  secretary  wrote  another  promi- 
nent dealer  belonging  to  the  Western  association  regarding  the  con- 
ference that  had  been  held  at  Chicago,  when  the  matter  was  taken 
up  before  the  arbitration  committee  with  some  of  the  high  officials 
of  the  plow  company  present.    He  stated  that  they  set  up  the  de- 
fense that  these  branches  were  conducted  solely  by  their  managers 


140 


FARM-MACHINERY  TRADE  ASSOOUTIONB. 


who  financed  them  and  that  the  plow  company  itself  had  no  money 
m  them.  The  secretary  expressed  his  opinion,  however,  that  the  offi- 
cials were  in  a  position  to  control  such  matters  and  that  the  dealers 
would  demand  that  they  do  so.  At  about  the  same  time  the  secre- 
tary also  addressed  a  manufacturer  who  had  apparently  written  him 
requesting  literature  on  the  subject  of  branch  retail  stores.  In  this 
letter,  after  citing  mstances  where  the  dealers'  trade  had  been 
impaired  by  branch  retail  stores,  he  said,  in  part: 

I  only  mention  these  matters  to  give  you  a  general  idea  of 
what  a  dreadful  menace  the  branch-house  evil  is  to  the  regular 
dealer.  The  danger  is  that  if  these  branch  houses  are  success- 
ful other  manufacturers  and  jobbers  will  adopt  the  plan,  and 
that  it  will  eventually  mean  an  entire  change  m  the  retail  busi- 
ness. The  International  Harvester  Co.  at  one  time  employed  a 
great  many  salaried  agents  who  were  in  reality  only  branch- 
house  managers.  They  have,  if  our  information  is  correct,  dis- 
continued practically  all  of  these.  I  know  of  none  now  withm 
the  territory  of  the  Federation.  We  have  the  statement  of  the 
sales  managers  that  none  exist  anywhere.  But  you  will  readily 
see  that  if  the  other  large  manufacturers  are  allowed  to  handle 
the  retail  business  in  this  way,  no  objection  can  be  made  to 
the  International  Harvester  Co.  if  they  see  fit  to  adopt  the  same 

^  This  is  the  subject  which  is  now  worrying  the  dealers  more 
than  anything  else,  and  the  supposition  is  that  it  will  be  dis- 
cussed at  all  of  the  conventions  and  probably  handled  without 
gloves. 
In  another  letter  in  the  latter  part  of  November,  1909,  the  secre- 
tary of  the  Federation  expressed  his  opinion  that  the  branch  house 
was  the  most  serious  existing  menace  to  the  implement  business.    He 
said  that  some  persons  had  declared  to  him  that  the  implement  busi- 
ness was  on  trial.    He  stated,  however,  that  he  could  not  feel  that 
this  was  true  to  a  very  alarmmg  extent,  but  he  did  know  that  the 
plow  company  in  question  was  establishing  a  great  many  branch 
houses,  particularly  m  good  localities  where  they  had  no  regular 
customers.    He  thought  that  the  matter  would  be  a  subject  of  warm 
debate  at  the  conventions  of  dealers  in  Iowa  and  Nebraska.    He 
thought  a  firm  stand  must  be  taken.  ,   ,       . 

At  the  conventions  of  the  various  dealers'  associations  belonging 
to  the  National  Federation  in  the  latter  part  of  1909  and  early  part 
of  1910  the  matter  of  branch  retail  stores  was  a  prmcipal  subject 
of  discussion.  The  Implement  Dealers'  Bulletin  in  February,  1910, 
printed  the  resolutions  condemning  such  stores  which  had  been 
passed  by  the  National  Federation  as  well  as  the  Iowa,  Illinois, 
Western,  South  Dakota,  and  Mid-West  (Nebraska)  associations. 
In  conclusion,  the  Bulletin  made  the  following  comment : 

It  is  all  right  for  them  [dealers'  associations]  to  define  their 
position  regarding  this  matter,  but  adopting  resolutions  is  only 


BBSTRIOTIOlSr  OF  RETAIL  TRADE  TO  RETAIL  DEALERS.  141 

the  preliminary  proceeding.  If  dealers  expect  anything  to  be 
accomplished  they  must  assist  in  supplying  information,  they 
must  uphold  the  hands  of  their  officers,  and  they  must  assist  in 
strengthening  their  organizations  so  that  they  will  become  a 
still  greater  power  than  they  are  at  present  and  be  in  a  position 
to  enforce  their  demands. 

Now  do  not  say,  "  Yes,  that  is  so,"  then  forget  all  about  it, 
but  go  to  work.  If  your  dues  are  in  arrears,  remit,  for  it  takes 
money  to  carry  on  this  work.  If  you  have  a  competitor  who  is 
not  a  member,  go  to  him  and  explain  the  situation  and  secure  his 
application.  Association  officials  are  thoroughly  alive  to  the 
importance  of  aggressive  action,  but  they  must  have  your  sup- 
port.   Will  you  see  that  they  receive  it  ? 

The  subject  was  again  taken  up  at  the  annual  meeting  of  the  Na- 
tional Federation  at  Chicago  in  October,  1910.  The  president  in 
his  address  stated  that,  with  a  single  exception,  all  manufacturers  and 
jobbers  who  had  been  interviewed  on  the  subject  denied  owning  or 
being  interested  in  any  retail  branch  store.  He  stated  that  the  mat- 
ter of  finding  out  the  facts  devolved  upon  the  different  constituent 
associations  of  the  Federation,  and  asserted  that  it  was  necessary 
for  the  Federation  to  have  reliable  information  as  to  the  identity 
of  the  offending  manufacturers  and  jobbers  before  it  could  take 
action.  Reference  to  this  matter  was  also  made  in  the  report  of  the 
secretary.  He  characterized  it  as  a  subject  of  most  vital  importance 
for  consideration.  One  session  of  the  convention  was  taken  up  al- 
most entirely  with  a  discussion  of  the  reports  in  regard  to  branch 
retail  houses,  and  the  question  was  finally  referred  to  the  com- 
mittee on  resolutions  with  instructions  to  define  the  position  of  the 
Federation.  A  special  committee  was  appointed  to  consider  evidence 
that  had  been  introduced  and  to  make  further  investigation. 

The  matter  was  also  brought  up  at  the  conference  between  com- 
mittees of  the  Federation  and  the  National  Association  of  Agricul- 
tural Implement  &  Vehicle  Manufacturers.  It  was  reported  that  at 
this  conference  the  representatives  of  the  dealers'  Federation  ex- 
plained the  specific  complaints  which  had  been  filed  and  asked  for 
the  cooperation  of  the  manufacturers  in  discountenancing  and  dis- 
couraging the  spread  of  this  class  of  retail  establishments.  The 
alleged  demoralizing  effect  these  stores  had  on  the  trade  of  dealers 
in  localities  where  they  were  maintained  was  shown,  and  it  was  the 
consensus  of  opinion  that  great  good  could  be  accomplished  by  the 
cooperation  of  all  of  the  associations  in  all  branches  of  the  trade. 
The  burden  of  furnishing  proof  in  cases  reported,  it  was  agreed, 
•  should  rest  with  the  dealers. 

At  this  meeting  the  delegates  to  the  Federation  meeting  recom- 
mended that  each  of  the  constituent  associations  should  amend  its 


142 


VABM-MAOHINEBY  TEADE  ASSOCIATIONS. 


constitution  by  eliminating  the  article  relating  to  members  reporting 
direct  sales  to  ^e  secretary  of  the  association.  (See  p.  187.)  The 
dele/^ates  also  recommended  the  elimination  of  the  second  paragraph 
of  the  declaration  of  purpose,  which  read  as  follows: 

We  recognize  the  absolute  right  of  every  person,  partnership 
or  corporation  to  establish  and  maintain  as  many  retail  stores 
as  he,  they,  or  it  may  see  fit. 

Eesolutions  adopted  by  the  Federation  at  this  time  read  as  follows: 

Evidence  having  been  submitted  showing  that  a  few  jobbers 
and  manufacturers  still  persist  in  maintaining  retail  branch 
bouses. 

We,  your  committee,  do  most  earnestly  emphasize  our  Federa- 
tion principle  that  "  to  the  retailer  belongs  the  retail  trade,"  and 
denounce  in  unmeasured  terms  as  unfair,  unreasonable  and 
unbusinesslike  the  practice  of  so  entering  into  competition, 
directly  or  indirectly,  with  the  regular  retail  dealers,  upon 
whom  they  must,  and  do  depend,  for  the  bulk  of  their  business. 

Shortly  afterwards  the  committee  on  dealers'  associations  reported 
to  the  members  of  the  National  Association  of  Agricultural  Imple- 
ment &  Vehicle  Manufacturers  that  the  Federation  had  presented  to 
the  manufacturers'  committee  for  consideration  the  dealers'  earnest 
and  aggressive  opposition  to  manufacturers  or  jobbers  owning,  oper- 
ating, or  being  interested  in  retail  implement  and  vehicle  stores.  In 
accordance  with  the  recommendations  of  this  committee,  the  members 
of  the  National  Association  of  Agricultural  Implement  &  Vehicle 
Manufacturers  voted  to  adopt  a  resolution  reaffirming  and  emphasiz- 
ing the  resolution  on  this  subject  adopted  the  year  before.  (See 
p.  145.) 

Under  date  of  October  25, 1910,  the  secretary  of  the  National  Fed- 
eration in  a  general  letter  to  secretaries  of  the  constituent  associations 
on  the  subject  of  convention  programs  pointed  out  that  the  dealers 
in  many  localities  were  alarmed  over  the  "branch-house  evil,"  and 
that  the  Federation  had  asked  for  further  evidence  to  establish  be- 
yond question  the  extent  to  which  this  evil  was  spreading.  He 
advised  the  secretaries  that  it  was  a  subject  that  should  be  discussed 
at  the  conventions  of  their  associations  and  that  it  was  possible  that 
it  would  be  better  to  do  so  in  executive  session.  He  requested  them 
to  note  the  position  taken  by  the  Federation  and  the  trend  of  the 
discussion  of  the  subject  at  the  conference  with  the  manufacturers. 

In  November,  1910,  the  secretary  of  the  Federation  wrote  one  of 
the  dealers  a  confidential  letter  in  which  he  stated  that  another 
interview  had  been  held  with  a  high  official  of  the  plow  company 
complained  of  as  establishing  branch  retail  stores.  The  secretary 
stated  that  this  official  had  promised  to  go  to  Omaha  himself  to  make 
a  personal  investigation  of  conditions.  In  this  letter  the  secretary 
said,  in  part: 


^ 


>■ 


BESTBIOTIOK  OP  BETAIL  T&ADE  TO  RETAIL  DEALERS. 


143 


1 


I  refer  to  the  trouble  with  branch  houses.  I  believe  that  we 
have  that  situation  pretty  well  in  hand.  Such  a  tremendous 
uproar  has  gone  up  that  I  doubt  if  those  people  will  establish 
any  more  even  though  they  may  not  discontinue  what  they  have. 
I  thought  this  information  might  be  of  interest  to  you  on  account 
of  conditions  at  Chillicothe. 

In  April,  1912,  the  secretary  of  the  Iowa  dealers'  association  wrote 
the  secretary  of  the  National  Federation  in  regard  to  the  activities 
of  his  association  in  the  matter  of  branch  retail  stores.  He  stated 
that  one  of  the  members,  whom  he  mentioned,  would  do  his  utmost  to 
convince  the  plow  company  (whose  policy  of  maintaining  branch 
houses  had  created  so  much  apprehension  among  the  dealers)  that 
4,mch  a  policy  was  a  bad  one  to  promote,  being  detrimental  to  the 
trade.  The  secretary  of  the  Iowa  association  also  expressed  his  opin- 
ion that  if  the  Iowa  association  could  not  have  the  cooperation  of 
other  organizations  it  could  not  make  effective  opposition.  He 
thought  the  policy  was  going  to  become  general  unless  the  dealers 
were  active,  and  he  stated  that  it  was  reported  that  a  buggy  com- 
pany, the  name  of  which  he  gave,  had  already  established  four  re- 
tail branches  in  Iowa.  He  believed  that  it  would  not  be  long  until 
\  other  manufacturers  followed  suit  and  that  the  very  existence  of  the 
retail  dealers  was  threatened.    He  went  on  to  say: 

We  can  voice  our  opposition  in  a  proper  manner,  and  if  [we] 
have  the  facts  to  present,  we  should  at  least  get  a  fair  hearing. 

He  appeared  to  think  that  if  the  dealers  went  to  the  plow  company 
in  question  without  any  evidence  their  efforts  would  be  unavailing. 

At  the  convention  of  the  Federation  in  October,  1912,  the  report 
of  the  secretary  stated  that  manufacturers'  branch  retail  stores  in 
some  localities  were  causing  dealers  much  uneasiness  and  annoyance, 
and  was  of  so  much  importance  that  it  should  have  attention. 
Among  the  resolutions  adopted  by  the  delegates  at  this  convention 
was  one  to  the  following  effect: 

The  maintaining  of  retail  stores  by  jobbers  and  manufac- 
turers is  unjust,  and  is  emphatically  condemned  not  only  by  this 
Federation,  but  by  right  thinking  men  in  all  lines.  Improved 
conditions  of  the  trade  is  shown  by  the  fact  that  but  one  promi- 
nent manufacturer  continues  to  maintain  such  branches,  and  it 
is  only  fair  to  state  that  the  number  is  reduced  and  we  are 
assured  it  is  the  policy  of  this  company  to  soon  discontinue 
them  entirely. 

Direct  sales  in  LOCALrriES  where  manufacturer  has  no  agent. — 
At  the  annual  meeting  of  the  National  Federation  in  October,  1909, 
the  president  expressed  his  belief  that  the  Federation  should  outline 
clearly  to  each  constituent  association  its  views  regarding  the  condi- 
tions under  which  manufacturers  should  sell  their  goods  to  con- 
sumers in  territory  where  they  had  no  representatives,  a  matter  that 


J I 


144 


FAEM-MACHINBBY  TRADE  ASSOOIATIOKS. 


had  already  been  brought  up  by  the  dealers.  (See  p.  181.)  A  little 
later,  at  a  meeting  of  the  conference  committees  of  the  National 
Federation  and  the  National  Association  of  Agricultural  Imple- 
ment &  Vehicle  Manufacturers,  in  October,  1910,  at  which  the  matter 
of  branch  stores  operated  by  manufacturers  was  discussed  (see 
p.  141),  the  committee  representing  the  Federation  took  the  position 
that  manufacturers  who  sell  the  bulk  of  their  output  to  dealers 
should  not  sell  at  retail.  Instances  were  mentioned  where  manufac- 
turers had  sold  goods  directly  and  when  called  to  account  had 
replied  that  they  were  holding  commissions  to  be  paid  to  a  dealer 
who  would  contract  for  their  goods.  The  dealers  insisted  that  this  is 
not  affording  the  trade  full  protection.  One  member  of  the  manu-  \ 
f  acturers'  committee  said  that  this  seemed  to  be  a  new  phase  of  the 
direct-selling  question,  and  it  was  his  opinion  that  manufacturers 
claimed  the  right  to  sell  directly  at  retail  prices  where  they  were 
not  represented  by  dealers,  especially  where  they  were  introducing 
new  goods  and  did  not  see  how  they  could  introduce  new  goods 
successfully  where  they  were  imable  to  interest  dealers  unless  by 
selling  directly.  He  expressed  the  opinion  that  this  evil  had  not 
reached  very  serious  proportions.  Another  member  said  that  as  a 
general  rule  manufacturers  believe  that  it  is  no  violation  of  trade 
ethics  to  sell  directly  at  retail  prices  and  pay  the  commission  to  the 

nearest  dealer. 

The  committee  representing  the  dealers  said  that  of  course  they 
would  acquiesce  in  that  kind  of  an  arrangement,  but  that  commis- 
sions in  such  cases  were  rarely  ever  paid  until  such  time  as  an  agency 
could  be  established,  and  insisted  that  the  manufacturers  in  all  cases 
where  direct  sales  are  made  should  try  to  make  delivery  through 
some  regular  dealer,  permitting  the  customer  to  name  the  dealer 
through  whom  he  would  prefer  having  delivery  made.  They  also 
took  the  position  that  in  a  very  large  majority  of  direct  sales  prices 
maintained  are  much  lower  than  the  dealer  must  get  if  he  properly 
figures  his  costs.  They  expressed  the  belief  that  it  might  not  be 
possible  to  make  any  hard  and  fast  rule,  yet  dealers  must  have 
better  cooperation  on  the  part  of  manufacturers  and  jobbers  than 
they  were  receiving.  The  representatives  of  the  manufacturers' 
association  promised  to  present  the  views  of  the  dealers  to  the  next 
convention  of  the  manufacturers'  association  and  to  urge  action 
along  the  lines  suggested.  In  connection  with  this  subject,  the 
Federation  adopted  the  following  resolution: 

In  view  of  the  resulting  strife  and  demoralization  caused  by 
direct  sales  by  jobbers  and  manufacturers,  ♦  ♦  ♦  goods  in 
our  line  should  be  marketed  through  the  regular  retail  dealers, 
and  that  even  if  extreme  circimistances  seem  to  justify  a  sale  to 


4.' 


BESTBIOHOK  OF  SBTAIL  TRADE  TO  RETAIL  DEALERS.  146 

user  it  should  never — ^under  any  circumstances  whatever — ^be 
made  except  at  a  fair  reasonable  retail  price  and  delivery  should 
in  all  cases  be  made  through  some  retail  dealer. 

The  representatives  of  the  manufacturers'  association  in  their  re- 
port to  the  convention  of  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers,  in  November,  1910,  explained 
this  attitude  of  the  organized  dealers  toward  direct  sales,  as  follows : 

They  presented  to  us  a  question  that  to  them,  and  to  us,  is 
of  great  importance;  and  that  is,  the  retailing  of  goods  by  fac- 
tories and  jobbers  direct  to  consumers.    They  request  as  follows: 

First.  That  all  such  sales,  as  far  as  possible,  should  not  be 
made,  but  that  the  consumers  be  referred  to  the  nearest  retail 
^         dealer. 

Second.  That  if  any  sales  at  all  are  made  direct  to  con- 
sumer they  should  always  be  made  at  proper  retail  prices — 
such  as  will  give  the  dealer  a  legitimate  profit  above  his  expense 
of  doing  business. 

Third.  That  where  it  is  impractical  or  impossible  to  make 
such  a  sale  through  a  dealer,  the  sale  should  be  made  at  retail 
prices,  and  that  delivery  should  be  made  through  some  dealer. 

In  behalf  of  these  requests,  the  dealers  state  that  it  is  not 
alone  the  question  of  the  profit  on  any  particular  retaU  sale 
that  might  be  made,  though  as  to  that  they  feel  that  some  dealer 
should  always  have  the  profit  or  commission,  but  the  main 
point  to  which  they  object,  in  the  retailing  of  goods  by  factories 
and  jobbers  direct  to  consumers,  is  that  it  gets  such  consumers 
into  the  notion  that  it  is  a  good  thing  to  buy  direct  from  the 
factory.  Probably  some  members  of  our  association  do  not 
realize  how  much  is  going  on  in  the  trade  along  these  lines  of 
direct  selling.  Nowadays  there  are  not  only  the  old-time  cata- 
logue houses  selling  all  lands  of  goods,  including  implements  and 
vehicles  direct  to  consumers,  and  at  prices  which  they  are  try- 
ing to  make  the  consumer  believe  are  wholesale  prices,  but  there 
are  several  direct  selling  factories  in  the  implement  and  ve- 
hicle lines. 

At  this  convention  the  manufacturers  adopted  the  following  reso- 
lution : 

Resolved,  First.  That  we  reaffirm  and  emphasize  the  resolu- 
tion adopted  last  year  at  our  convention  in  Chicago  against  the 
establishment  of  retail  houses  by  factories  and  jobbers. 

Second.  Whenever  it  is  necessary  for  a  factory  to  make  a 
direct  sale  to  the  consumer,  that  it  ought  to  be  done  at  retail 
price,  and  when  at  all  practical  said  machine  or  vehicle  should 
be  delivered  through  some  dealer. 

Third.  That  the  secretary  be  and  is  hereby  instructed  to  mail 
a  copy  of  this  resolution  to  each  member  with  a  special  bulletin 
calling  attention  to  same,  on  account  of  the  unusual  importance 
this  resolution  to  the  trade. 

Resolved,  That  we  express  our  appreciation  of  the  coopera- 
tion of  the  Dealers'  Federation  in  their  efforts  to  eliminate  trade 
evils  and  in  promoting  the  general  welfare  of  the  business. 


e8248'— 16- 


-10 


146 


FABM-MAOHnraKT  TBADB  A880CIATIOH8. 


SESTBICTION  OF  KBTAIL  TBADB  TO  BETAIL  DEALEBS. 


147 


!) 


In  compliance  with  this  resolution,  the  Secretary  of  the  National 
Association  of  Agricultural  Implement  &  Vehicle  Manufacturer 
issued  a  circular  letter  to  members  under  date  of  November  11, 1910, 

in  which  this  resolution  (which  also  related  *^tl»«  ;^'*''^^^Jj"«'Jl*^ 
branch  retail  stores  by  manufacturers)  was  set  forth.     Ihis  letter 

concluded  as  follows: 

Every  time  you  fail  to  be  governed  by  the  spirit  of  t^^^^^y 
lutions  vou  take  a  step  towards  the  elimmation  of  the  retail 
d^ra  Hactore  in  the  sale  and  distribution  of  your  product. 

WraS.e!d  toyou  to  assist  in  curing  this  menace  to  the  ex- 
istence of  the  independent  retail  dealer. 
At  a  conference  between  the  conference  «>mmittees  of  the  Na- 
tional  Implement  &  Vehicle  Association  and  *e  We^m  .^m- 
tion  held  in  January,  1911,  the  dealers  present  agam  J'^'^^g^*  ""P  *J« 
subject  of  direct  sales  in  territory  where  the  manufacturers  could 
find  no  regularly  established  dealer  to  represent  their  Imes.    ahe 
chairman  of  the  manufacturers'  association  committee  was  ques- 
tioned as  to  the  attitude  of  the  manufacturers  on  this  subject.    He 
replied  that  the  manufacturers  belonging  to  the  National  Implement 
&  Vehicle  Association  stood  with  the  dealers'  associations  on  the  prin- 
dple  that  to  the  regular  retail  dealer  belongs  the  retail  trade  but 
hfLked  how  manufacturers  could  ever  introduce  new  machm^ 
into  territory  where  the  dealers  would  not  take  up  the  sale  of  such 
^tSess  the  manufacturer  sold  directly.   ?-  <^^e  dea^- 
present  expressed  the  opinion  that  the  position  of  the  dealers  a^ 
dations  might  be  somewhat  elastic  in  such  -^Jl^^'^^^s 
elusion  was  reached,  but  it  was  pomted  out  to  the  manufacturers 
that  by  direct  sales  in  invading  territory  where  other  manufacturers 
of  similar  goods  were  selling  through  the  regular  dealers,  reprisal 
was  invited  from  these  other  manufacturers  in  other  sections  where 
the  latter  had  no  agents  but  where  the  former  class  of  manufacturers 
mieht  have  a  trade  with  dealers.    It  was  pointed  out  that  in  this 
way  the  whole  system  of  marketing  through  dealers  might  become 
demoralized,  since  it  would  be  impracticable  for  all  manufacturers 
to  be  represented  everywhere  by  regular  dealers. 

Dbm^'  associations  and  the  thkesheb  TRADE.-The  retail  dealer 
is  a  less  important  figure  in  the  sale  of  threshmg  machinery  than  m 
the  sale  of  most  other  kinds  of  farm  machinery  and  implements,  ow- 
ing principally  to  the  expensive  character  of  threshing  outfits,  the 
nJeiity  imposed  upon  manufacturers  of  extending  long  terns  of 
credit  to  purchasers,  and  the  pressure  of  competition  among  manu- 
facturers to  dispose  of  factory  output.  Consequently,  a  large  pro- 
portion of  sales  is  made  directly  to  the  farmer  or  thresherman 
airough  salesmen  employed  by  the  manufacturers.  The  manufac- 
turers,  however,  have  continued  to  make  commission  contracts  with 


ii^ 


«» 


4 


^ 


dealers  in  order  to  secure  their  local  influence  in  pushing  sales,  to  get 
reports  concerning  prospective  customers,  and  to  have  them  handle 
repair  parts. 

During  the  last  three  or  four  years  a  committee  of  the  imple- 
ment dealers'  Federation  has  made  a  determined  effort  to  secure 
a  larger  proportion  of  the  trade  to  dealers.  The  matter  has  been 
presented  to  the  National  Association  of  Thresher  Manufacturers, 
and  conferences  have  been  held  between  the  executive  committee  of 
that  association  and  representatives  of  the  Federation.  Little  prog- 
ress, however,  has  been  made.  Individual  thresher  manufacturers 
assure  the  dealers  that  they  desire  to  sell  through  them  to  as  great 
^  an  extent  as  possible,  but  point  out  difficulties  that  render  the  use 
of  this  method  of  sale  impracticable  under  present  conditions  in  the 
thresher  trade.  Furthermore,  dealers'  associations  take  the  position 
that  the  dealer  should  be  allowed  a  commission  on  all  thresher  repairs 
sold  by  him,  irrespective  of  whether  he  has  any  contract  with  the 
particular  manufacturer  from  whom  such  repairs  are  ordered.  This 
matter  is  still  unsettled  between  members  of  the  thresher  manu- 
facturers' association  and  of  the  federated  dealers'  associations. 

Section  3.  Settlement  of  complaints  against  individual  manufacturers. 

The  by-laws  adopted  by  the  Federation  in  1900  provided  as 
follows : 

All  complaints  made  against  manufacturers,  jobbers  and 
wholesalers  shall  be  first  taken  up  and  be  referred  to  the  secre- 
tary of  the  association  in  which  the  complainant  may  hold  his 
membership,  for  adjustment.  In  case  of  failure  to  make  a  satis- 
factory settlement,  said  case  shall  be  referred  to  the  secretary  of 
the  National  Federation;  if  such  complaint  can  not  be  adjusted 
by  the  National  Federation,  it  shall  be  the  duty  of  the  national 
secretary  to  notify  the  secretaries  of  the  several  retail  associa- 
tions and  they  shall  at  once  notify  all  members  thereof. 

Methods  of  adjustment  by  State  associations. — Most  complaints 
were  settled  by  the  secretaries  of  the  constituent  associations  with- 
out being  referred  to  the  Federation.  Similar  methods  were  adopted 
by  the  different  associations  to  bring  about  an  adjustment.  Wbere 
a  complaint  was  filed  by  an  aggrieved  dealer,  it  was  the  duty  of 
the  secretary  to  verify  the  facts  and  endeavor  to  adjust  the  situa- 
tion amicably  with  the  manufacturer  complained  of,  collecting  a 
commission  on  the  sale  for  such  dealer  or  for  some  other  dealer  in 
the  locality  where  the  sale  had  been  made.  It  was  also  a  part  of  the 
secretary's  duty  to  secure  a  promise  from  the  manufacturer  that  his 
future  sales  would  be  confined  to  regular  dealers.  If  the  secretary 
was  unable  to  effect  satisfactory  settlement,  the  correspondence  in 
the  case  was  submitted  to  the  board  of  directors  or  grievance  com- 


9 


148 


FABM-MAOHINEBY  TBADB  ASSOOUTIONa 


mittee,  which  held  meetings  from  time  to  time  to  consider  the  evi- 
dence in  pending  complaints.  It  was  customary  for  this  committee 
to  request  manufacturers  and  jobbers  complained  of  to  appear  at 
such  meetings  to  explain  their  side  of  the  case.  Under  this  method 
of  handling  complaints,  most  cases  were  amicably  disposed  of,  but 
in  some  instances  the  facts  were  discussed  at  executive  sessions  of 
the  entire  membership  present  at  conventions. 

In  the  settlement  of  complaints  the  dealers  took  the  position  that 
a  proper  policy  of  protection  on  the  part  of  manufacturers  should 
provide  "  for  the  placing  of  agencies  with  parties  who  are  regularly 
established  in  that  line  of  business;  declining  aU  orders  from  parties 
who  simply  sell  from  catalog,  order  goods  as  they  sell  them  and 
carry  no  stock  on  hand;  selling  no  goods  at  retail;  selling  no  goods 
to  catalog  houses  or  trailors ;  and  be  willing  at  all  times  to  correct 
any  mistakes  made  that  interfere  with  the  welfare  of  the  legitimate 

dealer." 

The  president  of  the  Nebraska  association  in  his  annual  address 
to  the  members  m  1901  stated  that  the  manufacturers  were  accedmg 
to  some  extent  to  the  wishes  of  the  dealers,  and  so  far  as  he  knew 
they  were  anxious  to  see  them  succeed  and  prosper,  realizing  that 
their  interests  were  mutual.  The  secretary  of  the  Nebraska  asso- 
ciation reported  that  in  1895,  when  the  association  had  less  than  100 
members,  he  had  received  37  complaints,  but  during  1900,  with  over 
400  members,  he  had  received  only  13  complaints  of  illegitimate 
shipments.  In  all  cases  he  had  found  that  the  trouble  arose  in  re- 
gard to  the  definition  of  dealer.  He  said  that  in  most  cases  the 
manufacturers  had  been  willing  to  do  what  was  right,  but  a  few 
small  manufacturers  still  quoted  prices  to  the  consumer.  He  ex- 
pressed the  opinion  that  the  work  of  the  associations  had  about 
reached  the  point  where  no  reputable  house  would  make  shipments 
to  consumers  without  crediting  up  the  commission  due  to  the  dealer 

affected. 

In  January,  1902,  the  president  of  the  Western  association  stated 
that  there  were  still  some  manufacturers  and  jobbers  who  made  con- 
cessions unwillingly,  and  others  who  attempted  to  sell  a  small  part 
of  their  output  through  legitimate  dealers  and  the  larger  part 
directly  'to  consumers.  He  expressed  the  hope  that  the  members  of 
the  Western  association  were  "  too  well  conversant  with  their  own 
best  interests  and  too  loyal  to  those  who  cater  only  to  the  legitimate 
trade  to  be  caught  by  such  chaff."  At  this  convention  the  report  of 
the  grievance  committee  was  scheduled  to  be  made  at  executive  ses- 
sion, the  other  committees  to  report  in  open  session.  The  issue  of 
the  Implement  Dealers'  Bulletin  in  February,  1902,  stated  that  this 
executive  session  was  the  most  remarkable  one  ever  held  by  the  West- 


t 


BESTBIOTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS. 


149 


^ 


^ 


em  association,  there  being  over  500  present,  all  of  whom  were 
members. 

Apparently  for  the  purpose  of  pointing  out  that  the  activities  of 
the  Western  association  were  effective  in  affording  protection  to  its 
members,  the  Bulletin  published  the  following  article  in  March, 
1902: 

Evidence  that  the  association  protects  is  contained  in  two 
letters,  from  which  quotations  are  made,  one  from  a  large  ve- 
hicle concern  which  used  to  make  shipments  to  parties  who  were 
not  dealers,  reporting  that  it  has  recommended  that  a  certain 
dealer  join  the  association  and  qualify  for  recognition  as  a 
legitimate  dealer.  The  second  letter,  from  a  manufacturer  who 
did  not  find  the  name  of  a  party  wishing  to  order  a  vehicle,  in 
the  directory,  runs  as  follows: 

"We  desire  to  assure  you  that  unless  this  party  qualifies  for 
membership  in  the  association,  we  certainly  will  decline  to  re- 
ceive any  business  from  him.  The. tenor  of  his  correspondence 
indicates  that  he  is  very  anxious  to  become  a  legitimate  dealer, 
and  while  you  state  that  you  have  information  showing  that  he 
is  merely  a  catalog  dealer,  yet  it  is  very  possible  that  he  con- 
templates expanding  his  business.  At  all  events  we  will  make 
no  further  shipments  to  him  until  he  satisfies  both  yourself  and 
us  that  he  is  entitled  to  be  regarded  as  a  legitimate  dealer." 

The  Bulletin  issued  in  November,  1905,  contained  a  summary  of 
the  accomplishments  of  the  Western  association.  In  this  summary 
it  was  stated  that  the  prime  object  of  its  organization  was  protection 
of  its  members'  interests  and  the  prevention  of  direct  sales  or  sales 
to  catalogue  agents.  As  proof  that  the  association  had  been  success- 
ful it  claimed  that  over  1,200  complaints  had  been  satisfactorily  ad- 
justed and  that  sales  to  users  were  few  and  far  between  as  compared 
with  former  years.  Among  other  achievements,  it  claimed  that  the 
cultivation  of  friendly  relations  by  manufacturer,  jobber,  and  dealer 
had  resulted  in  better  protection  to  the  latter  and  the  discontinuance 
of  hundreds  of  irregular  or  catalogue  agencies.  In  a  subsequent 
issue  of  the  Bulletin,  members  of  the  Western  association  were  urged 
not  to  miss  the  executive  session  of  the  convention  in  January,  1906, 
at  which  the  report  of  the  grievance  committee  and  various  phases 
of  the  catalogue-house  question  were  to  be  taken  up.  It  was  stated 
that  no  report  of  the  meeting  would  be  published,  and  the  only  way 
for  members  to  learn  what  had  been  done  and  what  was  in  progress 
in  the  way  of  securing  protection  for  members,  was  to  attend  this 
session.  Furthermore,  there  were  some  matters  that  the  officers  had 
been  unable  to  adjust,  regarding  which  they  would  ask  the  conven- 
tion for  further  instructions.  The  various  other  constituent  associa- 
tions of  the  Federation  continued  to  handle  complaints  from  their 
members. 


150 


FABM-MAOHINEBY  TRADE  ASSOCIATIONS. 


In  March,  1906,  the  directors  of  the  Western  association  took 
action  deploring  the  methods  of  many  scale,  gasoline-engine,  hay- 
press,   and   windmill   manufacturers   in   not   marketing   products 
through  regular  implement,  vehicle,  and  hardware  dealers.     The 
directors  recommended  that  the  members  of  the  Western  association 
make  contracts  with  "  reputable  "  manufacturers  and  jobbers  in  these 
lines  and  prosecute  sales  vigorously  as  the  surest  means  of  upholding 
the  committee  in  its  efforts  to  remedy  the  existing  conditions.    The 
Bulletin  pointed  out  that  the  dealer  must  be  able  to  handle  the  trade 
according  to  the  demands  of  his  territory,  as  otherwise  the  board  of 
directors  had  small  chance  to  assist  him  in  contending  for  commis- 
sions on  sales.    In  August,  1906,  the  BuUetm  gave  the  name  of  a 
scale  company  which  was  reported  to  be  selling  directly  to  the  user, 
and  published  letters  from  two  other  companies  as  to  their  policy  in 
protecting  dealers.    The  board  of  directors  held  a  meeting  in  July, 
1906,  at  which  20  cases  wei*e  taken  up  and  disposed  of,  interviews 
with  managers  of  the  defendant  concerns  being  held  in  some  cases. 
It  was  reported  that  where  the  evidence  was  such  as  to  sustain  the 
dealer's  contention  quick  adjustments  were  secured. 

Adjustment  hy  cooperation  with  jobbers^  clubs.— In  May,  1901,  a 
conference  between  the  executive  committee  of  the  Iowa  Implement 
Dealers'  Association  and  the  Manufacturers'  Implement  &  Vehicle 
Club  of  Des  Moines  resulted  in  an  agreement  for  cooperation  in  the 
adjustment  of  complaints  and  settlement  of  claims  filed  by  members 
of  the  association  against  manufacturers  or  jobbers.    A  joint  arbi- 
tration committee  was  also  formed  in  Minnesota,  composed  of  the 
grievance  committee  of  the  Minnesota  Retail  Implement  Dealers' 
Association  and  five  representatives  of  the  Twin  City  Implement, 
Vehicle  &  Hardware  Club,  to  confer  on  matters  complained  of  by 
members  of  the  dealers'  association.   A  similar  arrangement  had  been 
put  in  operation  at  Kansas  City  between  the  Kansas  City  jobbers' 
dub  and  the  Western  association,  apparently  as  an  outgrowth  of  a 
request  of  the  officers  of  the  Western  association  in  1905  for  the  co- 
operation of  the  jobbers  in  giving  information  to  parties  trying  to 
secure  goods  at  wholesale.    An  arrangement  was  effected  under  which 
the  secretary  of  the  Western  association,  after  verifying  the  facts, 
notified  the  secretary  of  the  jobbers'  club  of  any  cases  that  came  to 
the  attention  of  the  former  where  persons  who  claimed  to  be  imple- 
ment dealers  and  attempted  to  buy  goods  of  any  Kansas  City  jobber 
were  proved  to  be  what  the  dealers'  association  termed  "  catalogue 
agents."    On  receipt  of  this  information  from  the  secretary  of  the 
dealers'  association,  the  secretary  of  the  jobbers'  club  notified  the 
members  of  that  club  in  order  to  prevent  the  person  claiming  to  be 
a  dealer  from  going  from  one  jobber  to  another.    The  secretary  of  the 
Western  association  always  furnished  the  name  of  the  jobber,  so  that 


i^ 


f 


^ 


^    I     • 


m 


BESTRIOTIOK  OF  BETAIL  TRADE  TO  BETAIL  DEALBBS.     151 

the  latter  could  verify  the  statements  made.  Moreover,  it  was  ar- 
ranged that  when  a  jobber  learned  of  any  one  practicing  such  meth- 
ods of  purchasing  goods,  he  should  notify  the  secretary  of  the  job- 
bers' club,  who  in  turn  should  notify  all  the  members.  No  mention 
was  made  of  this  arrangement  in  conventions  nor  in  the  Bulletin,  but 
it  was  claimed  to  be  effective.  In  the  several  cases  of  this  sort  that 
arose  the  secretary  of  the  jobbers'  club  notified  each  member  of  that 
club  in  the  following  form ; 

Gentlemen:  In  accordance  with  the  resolution  adopted  by 
this  club  to  cooperate  with  the  Western  association  in  prevent- 
ing sales  of  goods  at  wholesale  prices  to  parties  not  entitled  to 
same,  you  are  requested  to  investigate  before  filling  any  orders 
for  [here  follow  four  blank  lines  for  name  of  party  and  remarks] 
regarding  whom  a  complaint  has  been  made.    Further  particu- 
lars may  be  obtained  from  your  secretary. 
Some  of  the  jobbers'  clubs  appear  to  have  been  unwilling  to  enter 
into  cooperative  arrangements  with  dealers  in  adjusting  complaints. 
The  jobbers  at  Baltimore  had  gone  on  record  as  opposing  any  or- 
ganization of  dealers.    An  article  on  the  subject  published  in  the 
Bulletin  in  February,  1907,  read,  in  part,  as  follows: 

One  report  of  this  meeting  states  that  the  reason  given -for 
the  queer  action  taken  was  that  organization  places  too  great  a 
power  in  the  hands  of  dealers  to  "  club  "  the  jobbers  into  meeting 
unjust  demands.    They  can  not  find  a  single  instance  to  justify 
such  an  assertion.    It  has  not  been  the  policy  of  dealers'  associa- 
tions to  pursue  any  such  unwise  course.    If  it  had  been,  their 
growth  would  not  have  been  so  great  in  the  West  during  the 
past  ten  years. 
Subsequently  the  attitude  of  jobbing  houses  at  Omaha  toward 
dealers'  associations  led  to  some  comment  by  an  implement  trade 
paper  copied  in  the  Bulletin  in  January,  1910.    This  read,  in  part, 
as  follows: 

Indifference  to  the  efforts  of  the  men  who  are  devoting  their 
time  and  efforts  to  the  betterment  of  their  business  associates 
and  competitors  however,  is  a  short-sighted  and  unwise  policy. 
While  it  is  true  that  the  associations  have  succeeded  in  checking 
certain  practices  indulged  in  by  some  manufacturers  and  job- 
bers, to  their  discomfiture,  yet  the  outcome  has  proven  to  make 
for  the  interest  of  legitimate  business  on  both  sides  of  the  line. 
Indeed,  so  true  is  this  that  the  National  Association  of  Agri- 
cultural Implement  &  Vehicle  Manufacturers  has  put  itself  on 
record  as  being  distinctly  in  favor  of  the  retailers'  associations, 
and  its  members  and  officers  are  working  in  harmony  with  the 
National  Federation.  Why,  then,  should  the  jobbers  and  branch- 
house  managers  pursue  a  different  policy? 

"There  must  be  mutuality,  cooperation  and  reciprocity  be- 
tween the  two  branches  of  the  implement  trade,  or  it  will  go 


^ 


152  PABM-MACHINEBY  TRADB  ASSOCIATIONS. 

hard  with  both.  Let  the  jobbers  follow  the  lead  of  the  manu- 
facturers' association  and  there  will  be  brought  about  an  era 
of  mutual  good  feeling  which  will  amply  repay  the  small  sacri- 
fice entailed,  instead  of  creating  and  widening  a  breach  which 
bodes  no  good  to  either  party.  Let's  be  fair  all  around,  gen- 
tlemen." 

Methods  or  adjustment  used  by  Federation. — Complaints  against 
individual  manufacturers  or  jobbers  referred  to  the  Federation  were 
handled  in  much  the  same  manner  as  by  the  constituent  associations. 
The  secretary  of  the  Federation  endeavored  to  adjust  such  cases,  and 
in  those  that  he  was  imable  to  settle  satisfactorily  the  manufacturer 
or  jobber  complained  of  was  asked  to  appear  before  the  delegates. 
It  was  felt  that  the  Federation  had  a  great  advantage  over  the  State 
associations  in  settling  complaints,  by  reason  of  the  fact  that  when 
a  manufacturer  or  jobber  was  asked  to  appear  before  the  Federa- 
tion he  would  understand  that  the  dealer  making  the  complaint  had 
behind  him  the  force  of  the  whole  Federation  instead  of  a  single 
association. 

The  Federation  at  a  convention  in  October,  1901,  held  an  executive 
session  for  the  purpose  of  conferring  with  certain  manufacturers 
against  whom  complaints  had  been  filed.  It  was  reported  that  after 
listening  to  the  evidence  agreements  were  reached  satisfactory  to  all 
concerned.  The  Federation  also  adopted  resolutions  providing  for 
the  manner  of  handling  complaints  referred  to  it  by  the  constituent 

associations. 

The  following  case  may  be  cited  as  an  example  of  the  method 
used  by  the  Federation  in  adjusting  complaints  at  about  this  time. 
In  May,  1904,  implement  dealers  around  Fargo,  N.  Dak.,  organized 
the  Fargo  District  Retail  Implement  Dealers'  Association  and  re- 
quested the  State  association  to  assist  it  in  eliminating  direct  selling 
by  a  certain  drill-manufacturing  company,  and  to  request  its  mem- 
bers to  stop  buying  goods  of  the  company  if  such  a  course  proved 
necessary.  The  North  Dakota  &  Northwestern  Minnesota  association 
filed  this  complaint  with  the  Federation.  The  latter  took  the  matter 
up  at  a  meeting  in  November,  1904.  The  secretary  of  the  complain- 
ing association  reviewed  the  evidence.  It  appeared  that  a  representa- 
tive of  the  defendant  company  had  issued  a  circular  quoting  whole- 
sale prices  to  consumers  in  the  territory  of  the  complaining  asso- 
ciation. It  was  shown  by  the  evidence  that  the  circular  was  issued 
without  authority  or  approval  of  the  home  office,  and  that  the  defend- 
ants had  been  requested  to  withdraw  quotations  and  to  give  as  much 
publicity  to  the  fact  that  they  did  not  approve  of  the  action  taken  by 
their  manager,  as  had  been  given  to  his  circular.  The  secretary  of 
the  Federation  then  presented  a  letter  just  received  from  the  defend- 
ants, also  a  circular  which  they  had  recently  had  printed  and  mailed 
to  all  of  the  dealers  in  the  territory  of  the  complaining  association, 


BESTRIOTION  OF  BETAIL  TRADE  TO  RETAIL  DEALERS. 


153 


^ 


V 


which  indicated  a  desire  to  adjust  the  case  in  accordance  with  the 
wishes  of  the  complainants.  This  letter  and  circular  indicated  that 
their  branch  house  in  that  territory  would  be  immediately  discon- 
tinued and  that  the  trade  in  that  locality  had  been  notified  of  the  fact 
and  also  of  the  fact  that  the  defendants  proposed  to  protect  the  trade 
to  the  fullest  extent.  It  was  shown  that  this  letter  and  circular  had 
been  sent  out  immediately  upon  receipt  of  a  letter  from  the  secretary 
of  the  Federation  giving  notice  that  the  case  would  be  taken  up  at 
this  meeting  and  notifying  the  defendants  that  they  would  be  granted 
a  hearing.    In  the  settlement  of  this  case  it  was  voted  as  follows : 

That  the  secretary  be  instructed  to  advise  the  ♦  ♦  •  com- 
pany that  after  a  careful  consideration  of  the  complaint  of  the 
North  Dakota  and  Northwestern  Minnesota  Implement  Dealers' 
Association,  we  find  that  defendant's  manager  in  said  defendant's 
territory  was  guilty  of  a  very  great  violation  of  trade  ethics;  but 
in  view  of  their  statements  to  this  board,  in  which  they  disclaim 
any  knowledge  of  the  issuance  of  the  circular  which  was  sent  to 
consumers  quoting  drills  at  wholesale  prices,  and  promise  an 
early  discontinuance  of  their  retail  house  in  that  territory,  and 
give  assurances  that  their  policy  will  be  one  of  protection  to  the 
established  trade,  thus  recognizing  the  business  code  of  honor 
which  avoids  trespassing  upon  the  rights  of  the  retailer  while 
claiming  his  patronage,  and  have  used  their  best  efforts  to  give 
these  facts  as  much  publicity  as  was  given  to  the  circular  sent 
out  by  their  manager,  this  complaint  has  been  dismissed  as  an 
incident  closed. 

The  Federation  at  this  meeting  recommended  that  where  the 
manufacturer  or  jobber  complained  of  had  given  satisfactory  assur- 
ance of  an  intention,  in  good  faith,  to  afford  members  of  the  Federa- 
tion adequate  protection  in  the  future,  the  case  be  suspended,  and,  if 
the  promises  were  faithfully  kept,  that  the  complaint  be  withdrawn, 
as  it  was  the  policy  of  the  Federation  to  secure  the  cooperation  of  the 
manufacturers  and  jobbers  in  protecting  the  retail  trade  in  the  fu- 
ture, rather  than  to  insist  upon  the  payment  of  commissions  on  sales 
already  made. 

Apparently  the  Federation  was  not  aggressive  enough  in  prose- 
cuting complaints  to  suit  the  members  of  the  Tri-State  association.^ 
The  president  of  that  association  at  its  meeting  at  Cincinnati  in 
October,  1904,  made  a  vigorous  speech  in  regard  to  sales  to  irregular 
dealers,  in  which  he  is  reported  to  have  said : 

You  know  that  were  it  not  for  the  restraining  influences  of 
your  association  that  irregular  sales  would  flourish  in  these  good 

*In  1901  a  trade  paper.  In  referring  to  the  Tri-State  Vehicle  &  Implement  Dealers' 
Association,  composed  of  dealers  in  Ohio,  Indiana,  and  Kentucky,  stated  that  that  asso- 
ciation had  developed  amazing  strength  in  protecting  the  dealer.  It  stated  that  one  In- 
diana member  had  given  information  that  he  had  received  $65  in  commissions  from 
manufacturers  who  had  sold  vehicles  direct  to  consumers  in  his  vicinity,  but  that  prior 
to  the  organization  of  the  association  he  had  been  unable  to  obtain  adequate  commissions 
on  such  sales. 


154 


FABM-MAOHINEBY  TRADE  ASSOCIATIONS. 


States  like  the  proverbial  green  bay  tree.  Time  was  when  this 
was  the  condition  of  affairs,  and  unless  you  are  on  sentinel  duty 
it  will  happen  again.  ♦  ♦  ♦  The  obliteration  of  direct  selling 
is  what  I  consider  the  primary  object  of  organizations  like  this. 

The  secretary  of  the  Tri-State  association  also  criticized  the  Fed- 
eration as  ineffective,  and,  in  accordance  with  his  advice,  the  associa- 
tion withdrew  from  the  Federation,^  alleging  that  the  benefits  re- 
ceived did  not  warrant  the  payment  of  the  annual  dues. 

In  order  to  discourage  trifling  complaints  and  to  secure  systematic 
and  definite  information  in  other  cases,  the  Federation  at  its  meet- 
ing in  November,  1904,  reconmiended  that  the  secretary  furnish  the 
secretaries  of  the  constituent  associations  with  suitable  uniform  ques- 
tion blanks  for  use  among  their  members  in  securing  the  desired 
information  regarding  complaints  that  were  filed.  The  Bulletin,  in 
April,  1905,  announced  that  this  blank  had  been  prepared  and  that 
it  should  be  used  in  reporting  the  facts  of  each  irregular  sale  to  the 
secretaries  of  the  constituent  associations. 

With  regard  to  matters  beyond  the  reach  of  the  Federation,  it 
was  arranged  that  the  joint  board  of  dealers  and  manufacturers 
created  in  1908  (see  p.  136)  should  act  as  an  arbitration  board  of  last 
resort  for  the  settlement  of  complaints.  The  Bulletin  stated  that  the 
appointment  of  this  board  was  a  matter  of  great  importance  for 
which  dealers'  associations  had  been  working  a  long  time;  that  it 
would  mean  the  adjustment  of  many  complaints  that  would  other- 
wise remain  unsettled,  and  that  it  would  be  more  satisfactory  to  all 

concerned. 

Court  decision  against  methods  used  by  Iowa  Implement  Deal- 
ers' Association. — ^In  efforts  to  confine  the  retail  trade  to  the  retail 
dealer,  none  of  the  other  associations  appears  to  have  gone  so  far  as 
the  Iowa  Implement  Dealers'  Association  in  an  attempt  to  prevent 
manufacturers  and  wholesalers  from  selling  to  farmers'  cooperative 

stores. 

The  matter  of  farmers'  cooperative  stores  had  been  discussed  by 
the  Iowa  association  at  least  as  early  as  1900,  at  which  time  the  fol- 
lowing resolution  was  adopted : 

That  we  have  no  fight  to  make  against  the  so-called  catalogue 
houses  and  cooperative  societies,  holding  that  they  have  the  same 
right  to  seek  a  market  for  their  goods  as  ourselves,  but  that, 
under  no  circumstances,  will  we  allow  goods  of  the  makes  and 
brands  handled  by  them  to  be  in  our  houses,  thereby  advertis- 
ing the  wares  they  sell,  and  that,  therefore,  we  will  not  buy  from 
any  jobber  or  manufacturer  who  sells  to  such  concerns.  And  we 
expect  and  demand  of  our  secretary  and  our  trade  papers  that 
they  keep  us  informed  as  to  such  sales. 


iTbe  Trl-State  aasodatlon  subsequently  rejoined  the  Federation.     (See  Exhibit  26.) 


eestbiction  of  betail  trade  to  eetail  dealbes.        155 

Some  of  the  stores  owned  by  the  farmers'  cooperative  societies  in 
Iowa  had  been  handling  farm  machinery  for  several  years.  Owing 
to  the  activities  of  the  Iowa  Implement  Dealers'  Association,  they 
experienced  much  difficulty  in  obtaining  standard  lines  of  imple- 
ments from  manufacturers  and  jobbers.  According  to  the  Ketailers' 
Sentinel,  an  official  journal  published  by  the  secretary  of  the  Iowa 
Implement  Dealers'  Association,  a  manufacturing  company  whose 
name  was  given,  canceled  an  order  amounting  to  over  $2,000  because 
of  representations  made  to  it  by  the  Iowa  Implement  Dealers'  Asso- 
ciation, and  members  of  the  latter  association  were  requested  by  the 
paper  to  give  the  concern  liberal  patronage  because  of  this  action. 

In  1904  the  Iowa  Implement  Dealers'  Association  filed  a  complaint 
with  the  National  Federation  against  a  firm  of  jobbers  on  account 
of  sales  to  a  store  owned  by  a  farmers'  cooperative  society.  In 
referring  to  this  case,  the  secretary  of  the  Federation  in  his  annual 
report  for  1904  said : 

The  defendants  stubbornly  refused  to  adjust,  but  finally  wired 
me  asking  what  was  necessary  to  get  right  with  the  Iowa  dealers. 
The  claim  for  a  commission  was  withdrawn,  and  a  written 
promise  secured  that  they  would  sell  no  more  goods  except  to  the 
regular  trade.    This  was  a  satisfactory  adjustment  of  the  matter. 

Issue  was  precipitated  early  in  1904,  however,  on  a  complaint 
which  was  filed  with  the  secretary  of  the  Iowa  Implement  Dealers' 
Association  by  a  member  at  Gowrie,  Iowa,  to  the  effect  that  certain 
manufacturers  had  sold  farm  machinery  to  a  cooperative  store  at  that 
place.  Protest  was  made  by  the  association  to  the  manufacturers 
complained  of,  one  of  whom  continued  to  ship  goods  to  the  coopera- 
tive society  notwithstanding  the  protest.  As  a  consequence,  the  fol- 
lowing letter,  dated  April  22,  1904,  and  marked  "  Confidential  and 
for  members  only,"  was  issued  to  the  members  of  the  Iowa  Implement 
Dealers'  Association  by  the  secretary.   The  letter  read  as  follows : 

Gentlemen:  You  are  probably  aware  that  there  exists  in 
Iowa  organizations  called  farmers'  cooperative  societies.  Their 
name  signifies  who  compose  them.  They  generally  begin  first, 
by  handling  grain  and  live  stock.  They  then  add  lumber,  and 
usually  the  next  move  is  to  begin  handling  implements  and 
binding  twine. 

They  haveproven  to  be  a  detriment  to  the  regular  trade  in 
implements,  and  this  association  has  always  protested  against 
firms  who  sell  to  the  regular  dealer  in  Iowa,  supplying  them 

with  their  goods.  ^        •      t 

We  have  had  complaints  filed  with  us  from  Gowrie,  Iowa, 
as  one  has  recently  started  there  called  the  Farmers  Elevator 
Company.  All  firms  have  listened  to  our  protests  and  acceded 
to  our  wishes  in  the  matter  except  the  Emerson  Manufacturing 
Company  of  Rockf  ord,  lU. 


ir-l*i 


M 


liiii 


154 


FABM-MAOnmEBT  TRADE  ASBOOIATIONS. 


States  like  the  proverbial  green  bay  tree.  Time  was  when  this 
was  the  condition  of  affairs,  and  unless  you  are  on  sentinel  duty 
it  will  happen  again.  *  ♦  *  The  obliteration  of  direct  selling 
is  what  I  consider  the  primary  object  of  organizations  like  this. 

The  secretary  of  the  Tri-State  association  also  criticized  the  Fed- 
eration as  ineffective,  and,  in  accordance  with  his  advice,  the  associa- 
tion withdrew  from  the  Federation,*  alleging  that  the  benefits  re- 
ceived did  not  warrant  the  payment  of  the  annual  dues. 

In  order  to  discourage  trifling  complaints  and  to  secure  systematic 
and  definite  information  in  other  cases,  the  Federation  at  its  meet- 
ing in  November,  1904,  recommended  that  the  secretary  furnish  the 
secretaries  of  the  constituent  associations  with  suitable  imif  orm  ques- 
tion blanks  for  use  among  their  members  in  securing  the  desired 
information  regarding  complaints  that  were  filed.  The  Bulletin,  in 
April,  1905,  announced  that  this  blank  had  been  prepared  and  that 
it  should  be  used  in  reporting  the  facts  of  each  irregular  sale  to  the 
secretaries  of  the  constituent  associations. 

With  regard  to  matters  beyond  the  reach  of  the  Federation,  it 
was  arranged  that  the  joint  board  of  dealers  and  manufacturers 
created  in  1908  (see  p.  136)  should  act  as  an  arbitration  board  of  last 
resort  for  the  settlement  of  complaints.  The  Bulletin  stated  that  the 
appointment  of  this  board  was  a  matter  of  great  importance  for 
which  dealers'  associations  had  been  working  a  long  time;  that  it 
would  mean  the  adjustment  of  many  complaints  that  would  other- 
wise remain  unsettled,  and  that  it  would  be  more  satisfactory  to  all 
concerned. 

CJOURT  DECISION  AGAINST  METHODS  USED  BY  loWA  IMPLEMENT  DeAL- 

BBs'  Association. — ^In  efforts  to  confine  the  retail  trade  to  the  retail 
dealer,  none  of  the  other  associations  appears  to  have  gone  so  far  as 
the  Iowa  Implement  Dealers'  Association  in  an  attempt  to  prevent 
manufacturers  and  wholesalers  from  selling  to  farmers'  cooperative 

stores. 

The  matter  of  fanners'  cooperative  stores  had  been  discussed  by 
the  Iowa  association  at  least  as  early  as  1900,  at  which  time  the  fol- 
lowing resolution  was  adopted : 

That  we  have  no  fight  to  make  against  the  so-called  catalogue 
houses  and  cooperative  societies,  holding  that  they  have  the  same 
right  to  seek  a  market  for  their  goods  as  ourselves,  but  that, 
under  no  circumstances,  will  we  allow  goods  of  the  makes  and 
brands  handled  by  them  to  be  in  our  houses,  thereby  advertis- 
ing th6  wares  they  sell,  and  that,  therefore,  we  will  not  buy  from 
any  jobber  or  manufacturer  who  sells  to  such  concerns.  And  we 
expect  and  demand  of  our  secretary  and  our  trade  papers  that 
they  keep  us  informed  as  to  such  sales. 

^  The  Txl-8tate  associaUoQ  subsequently  rejoined  the  Federation.     (Bee  Exhibit  26.) 


V 


'i  • 


i     '4       • 


■ 


il 


BESTRICTION  OF  KETAIL  TRADE  TO  BETAIL  DEALEBS.  155 

Some  of  the  stores  owned  by  the  farmers'  cooperative  societies  in 
Iowa  had  been  handling  farm  machinery  for  several  years.  Owing 
to  the  activities  of  the  Iowa  Implement  Dealers'  Association,  they 
experienced  much  difficulty  in  obtaining  standard  lines  of  imple- 
ments from  manufacturers  and  jobbers.  According  to  the  Retailers' 
Sentinel,  an  official  journal  published  by  the  secretary  of  the  Iowa 
Implement  Dealers'  Association,  a  manufacturing  company  whose 
name  was  given,  canceled  an  order  amounting  to  over  $2,000  because 
of  representations  made  to  it  by  the  Iowa  Implement  Dealers'  Asso- 
ciation, and  members  of  the  latter  association  were  requested  by  the 
paper  to  give  the  concern  liberal  patronage  because  of  this  action. 

In  1904  the  Iowa  Implement  Dealers'  Association  filed  a  complaint 
with  the  National  Federation  against  a  firm  of  jobbers  on  account 
of  sales  to  a  store  owned  by  a  farmers'  cooperative  society.  In 
referring  to  this  case,  the  secretary  of  the  Federation  in  his  annual 
report  for  1904  said : 

The  defendants  stubbornly  refused  to  adjust,  but  finally  wired 
me  asking  what  was  necessary  to  get  right  with  the  Iowa  dealers. 
The  claim  for  a  commission  was  withdrawn,  and  a  written 
promise  secured  that  they  would  sell  no  more  goods  except  to  the 
regular  trade.    This  was  a  satisfactory  adjustment  of  the  matter. 

Issue  was  precipitated  early  in  1904,  however,  on  a  complaint 
which  was  filed  with  the  secretary  of  the  Iowa  Implement  Dealers' 
Association  by  a  member  at  Gowrie,  Iowa,  to  the  effect  that  certain 
manufacturers  had  sold  farm  machinery  to  a  cooperative  store  at  that 
place.  Protest  was  made  by  the  association  to  the  manufacturers 
complained  of,  one  of  whom  continued  to  ship  goods  to  the  coopera- 
tive society  notwithstanding  the  protest.  As  a  consequence,  the  fol- 
lowing letter,  dated  April  22,  1904,  and  marked  "  Confidential  and 
for  members  only,"  was  issued  to  the  members  of  the  Iowa  Implement 
Dealers'  Association  by  the  secretary.   The  letter  read  as  follows : 

Gentlemen:  You  are  probably  aware  that  there  exists  in 
Iowa  organizations  called  farmers'  cooperative  societies.  Their 
name  signifies  who  compose  them.  They  generally  begin  first, 
by  handling  grain  and  live  stock.  They  then  add  lumber,  and 
usually  the  next  move  is  to  begin  handling  implements  and 

binding  twine.  . 

They  have'proven  to  be  a  detriment  to  the  regular  trade  m 
implements,  and  this  association  has  always  protested  against 
firms  who  sell  to  the  regular  dealer  in  Iowa,  supplying  them 

with  their  goods.  ^       .     x 

We  have  had  complaints  filed  with  us  from  Gowrie,  Iowa, 
as  one  has  recently  started  there  called  the  Farmers  Elevator 
Company.  All  firms  have  listened  to  our  protests  and  acceded 
to  our  wishes  in  the  matter  except  the  Emerson  Manufacturing 
Company  of  Rockf  ord,  IlL 


Ill 


156 


FABM-MAGHINEBY  TBADE  A8800IATI0KB. 


)i 


We  learned  that  they  had  taken  an  order  from  this  society 
at  Gowrie  for  a  half  car  of  goods.  We  wrote  them  requesting 
that  they  withhold  the  shipment.  While  in  correspondence 
with  us  they  made  the  shipment  and  decline  to  do  anything 
further  in  the  matter. 

When  this  reaches  you,  we  want  you  on  Monday,  April  26, 
1904,  to  write  them  a  letter  of  protest  in  regard  to  their  action. 
Please  remember  the  date,  as  we  wish  these  letters  to  reach  them 
on,  or  about  the  same  day.  By  doing  this  you  will  greatly 
oblige  and  at  the  same  time  show  them  something  of  the  strength 
and  influence  of  this  association. 

If  your  answer,  in  your  judgment,  should  be  sent  to  this  office, 
please  send  it  or  mail  us  a  copy. 
In  compliance  with  the  request  contained  in  this  letter,  many  mem- 
bers of  the  dealers'  association  addressed  letters  of  protest  to  the 
Emerson  company,  some  of  them  threatening  to  give  up  the  sale  of 

its  goods. 

Shortly  thereafter  the  sales  manager  of  the  manufacturer  wrote 
the  president  of  the  Iowa  Implement  Dealers'  Association,  saying, 
in  part: 

Inasmuch  as  a  few  of  our  best  friends  among  the  dealers  have 
expressed  a  desire  that  we  do  not  sell  these  parties  after  our 
present  contract  with  them  expires,  simply  because  the  impres- 
sion prevails  that  they  are  a  farmers'  cooperative  society,  we 
have  decided  to  respect  their  request 
The  company  appears  to  have  sold  no  more  goods  to  the  Gowrie 
company  at  this  time,  but  in  1905  its  sales  manager  again  wrote 
the  president  of  the  Iowa  Implement  Dealers'  Association  that 
his  company  had  received  another  order  for  plows  from  the  Farm- 
ers' Elevator  Co.,  but  had  instructed  its  general  agent  in  that  ter- 
ritory not  to  make  shipment  until  a  reasonable  time  for  the  matter 
to  be  taken  up  with  the  dealers'  association.  This  letter  requested 
the  president  of  the  dealers'  association  not  to  make  reply  until 
he  had  fully  considered  the  position  in  which  he  would  place  the 
Emerson  company  and  the  dealers'  association  by  an  unfavorable 
decision.  The  president  of  the  association  took  the  matter  up 
promptly  with  a  number  of  members,  including  the  member  located 
at  Gowrie,  from  whom  the  complaint  had  originated.  Later  in 
the  month  the  president  of  the  association  wrote  the  Emerson 
Manufacturing  Co.,  summarizing  several  letters  he  had  received 
from  members  in  reply  to  his  request  for  a  statement  of  their  ob- 
jections to  the  sale  of  goods  to  a  farmers'  cooperative  society.  The 
gist  of  these  replies  showed  that  the  dealers'  opposition  was  based 
upon  the  ground  that  cooperative  stores,  being  organized  to  do  away 
with  the  middleman's  profits,  sold  at  very  small  margins  and  no 
regular  dealer  could  get  business  from  the  members  unless  he  under- 
sold the  society  to  the  demoralization  of  trade.    The  letter  of  the 


> 


'% 

^ 


BBSTRICTION  OP  BETAIL  TRADE  TO  BBTAIL  DBALEES.     157 

president  of  the  Iowa  association  to  the  Emerson  Manufacturing 
Ca  concluded  as  follows : 

We  regret  that  you  feel  that  we  would  single  out  your  firm, 
and  attempt  to  impose  unjust  demands,  as  we  gather  from  your 
past  letters  to  us,  we  only  hope  for  your  hearty  cooperation  m 
this  matter,  which  is  a  vital  matter  to  the  implement  dealer, 
it  affects  his  existence  in  the  future,  and  his  prosperity  at  the 
present  time.    If  other  manufacturers  and  jobbers  sell  such 
concerns,  they  are  not  doing  so,  because  we  approve,  and  be- 
cause of  some  manufacturers  selling  such  concerns,  it  should 
not  excuse  another  manufacturer  doing  so,  if  the  principle  is 
wrong,  and  it  is  wrong,  as  we  look  at  it.    Our  dealers  associa- 
tions must  take  a  firm  stand  upon  this  question,  and  we  hope 
for  your  hearty  cooperation. 
On  September  25  the  Emerson  Manufacturing  Co.   wrote  the 
Farmers'  Elevator  Co.,  of  Gowrie,  advising  them  that  in  view  of  all 
the  conditions  the  company  had  concluded  to  stay  out  of  Gowrie 
until  different  conditions  prevailed  there. 

Early  in  1906  suit  against  the  Iowa  Implement  Dealers'  Association 
and  its  officers  was  filed  by  the  Farmers'  Elevator  Co.,  of  Gowrie, 
in  the  district  court  of  Webster  County,  alleging  that  the  complainant 
was  unable  to  purchase  implements  because  of  the  influence  of  the 
implement  dealers'  association  upon  the  manufacturers,  and  asking 
an  injunction  to  restrain  the  defendants  from  thus  interfering  with 
the  complainant's  business.  Evidence  in  the  suit  indicated  that  pres- 
sure had  been  brought  to  bear  upon  various  manufacturers  not  to  sell 
their  goods  to  the  Farmers'  Elevator  Co.,  of  Gowrie,  and  to  other 
cooperative  concerns  in  the  State  of  Iowa. 

On  October  12,  1909,  a  decree  was  entered  on  judgment  for  the 
complainant,  under  which  the  Iowa  Implement  Dealers'  Association 
and  all  members  were  enjoined  from  interfering  in  any  manner 
whatever  with  the  business  of  the  plaintiff.  In  reaching  a  decision 
in  favor  of  the  Elevator  company  the  court  found  that  the  defend- 
ants had  entered  into  an  agreement  for  the  purpose  of  impeding 
the  business  of  the  plaintiff  and  that  they  had  threatened  to  prevent 
jobbers  and  manufacturers  from  selling  to  the  plaintiff,  causing  them 
to  violate  contracts  made  with  the  plaintiff  to  the  injury  of  the  latter. 
The  court  further  found  that  at  the  time  of  the  commencement  of  the 
suit  and  at  various  other  times  the  defendants  published  a  journal 
called  the  Retailers'  Sentinel,  of  which  the  secretary  of  the  defendant 
association  was  editor.  The  court  found  that  the  association  and 
the  editor  published  in  this  journal  a  certain  black-list  notice  of 
manufacturers  and  jobbers  who  sold  to  persons  not  satisfactory  to 
the  association,  and  that  the  object  of  this  publication  was  to  prevent 
the  members  of  the  dealers'  association  from  dealing  or  trading  with 
the  manufacturers  and  Jobbers  for  the  purpose  of  instituting  an 


V 


I 


IM 


158 


FABM-MAOmKEBY  TBADS  ASSOOIATIOira 


unlawful  boycott  against  such  manufacturers  and  jobbers  and  to 
prevent  the  latter  from  trading  or  dealing  with  the  plaintiff  and 
others.    This  was  held  to  be  in  restraint  of  trade. 

Changes  in  articles  op  association  FouiOWiNO  court  decisions. — 
During  the  time  that  the  case  against  the  Iowa  association  was  before 
the  court  the  records  of  the  various  dealers'  associations  do  not 
contain  much  information  in  regard  to  their  activities  in  the  ad- 
justment of  complaints.  Uncertainty  as  to  the  outcome  of  this  suit 
and  the  pendency  of  suits  against  trade  associations  in  other  branches 
of  trade  seem  to  have  caused  the  implement  dealers'  associations 
to  proceed  cautiously  in  their  efforts  to  confine  trade  to  regular 
dealers. 

Under  date  of  March  4, 1908,  secretaries  of  the  constituent  associa- 
tions of  the  Federation  were  cautioned  in  a  general  letter  from  the 
secretary  of  the  Federation  that  developments  in  a  case  filed  with  the 
Federation  had  made  it  seem  desirable  to  call  their  attention  to 
the  fact  that  they  should  use  the  utmost  caution  in  the  wording  of 
their  letters  to  wholesalers  in  regard  to  complaints  which  had  been 
filed  by  members.    This  letter  read,  in  part,  as  follows: 

Be  very  careful  not  to  make  any  threats  either  direct  or  implied. 
Do  not  state  that  if  they  do  not  do  so  and  so  you  will  have 
to  report  the  case  to  the  National  Federation  for  consideration 
and  attention.  One  of  our  secretaries  in  a  recent  letter  to  a 
manufacturer  did  this,  and  the  manufacturer  was  incensed  and 
referred  it  to  his  attorney,  who  advised  him  that  the  writer 
could  be  prosecuted  for  using  the  mails  to  make  a  threat  of 
that  kind.  Whether  or  not  this  is  literally  true,  it  is  best  to 
avoid  trouble  of  this  kind,  and  easy  to  do  so. 

Let  me  caution  you  against  demanding  commissions,  as  the 
advice  I  have  is  that  this  can  be  construed  as  blackmail.  You 
are  doubtless  aware  of  this  fact,  but  I  thought  it  would  do  no 
harm  to  mention  it.    Kindly  acknowledge  receipt  of  this. 

In  October,  1908,  the  president  of  the  Federation  stated  that  he 
was  led  to  believe  that  the  members  of  local  associations*  were 
not  giving  sufficient  attention  to  the  filing  of  complaints,  and  that  the 
constituent  associations  of  the  Federation  were  not  making  use  of  the 
Federation  in  this  respect  to  the  extent  they  should,  the  members 
fearing  that  they  would  be  classed  as  "kickers"  if  they  burdened 
their  local  complaint  committees.  The  president  expressed  his  be- 
lief that  the  settlement  of  claims  strengthened  the  faith  of  the  mem- 
ber in  the  value  of  the  association  to  him.  In  April,  1909,  the  sec- 
retary of  the  Federation  addressed  a  general  letter  advising  the 
constituent  associations  to  encourage  their  members  to  report  ir- 
regular sales  and  urging  the  secretaries  to  prosecute  the  claims  vigor- 
ously.   In  this  letter  the  secretary  of  the  Federation  pointed  out 

*  In  this  connection,  see  pp.  102-168. 


#  # 


^ 


* 


BESTEICTIOlSr  OF  BETAIL  TRADE  TO  RETAIL  DEALERS. 


159 


that  every  claim  settled  helped  the  cause  of  the  dealers'  associations 
and  every  complaint  reported  to  the  wholesaler  made  him  more  care- 
full  in  the  future. 

In  1909  it  was  stated  that  practically  all  of  the  retail  implement 
associations  were  maintaining  systems  by  which  the  complaints  of 
members  against  manufacturers  and  jobbers  were  taken  up. 

One  of  the  implement  trade  papers,  in  discussing  the  advantages 
that  the  dealer  derived  from  belonging  to  an  association,  in  the  pro- 
tection he  received  as  a  result  of  association  activity,  pointed  out 
that  when  a  nonassociation  dealer  was  hurt  by  a  direct  sale  there  was 
no  one  to  whom  he  could  appeal  for  redress  except  the  offending 
manufacturer  and  jobber.  On  the  other  hand,  it  was  shown  that 
when  the  secretary  of  a  dealers'  association  took  up  such  matters 
in  the  name  of  the  association  for  members,  in  many  cases  a  com- 
mission was  obtained  and  in  other  cases  a  positive  promise  was  made 
that  direct  selling  in  that  particular  locality  would  cease.  If  the 
manufacturer  ignored  a  complaint  from  the  association  or  refused 
to  discontinue  direct  selling,  the  case  was  taken  to  the  National  Fed- 
eration, which,  it  was  stated,  had  been  remarkably  successful  in 
curbing  direct  selling  after  offenders  had  ignored  complaints  of  the 
State  associations. 

In  October,  1909,  the  president  of  the  Federation  expressed  the 
belief  that  the  Federation  should  seek  close  relations  with  the  con- 
stituent associations  in  their  work.  He  thought,  furthermore,  that 
claims  should  be  forwarded  to  the  secretary  of  the  Federation,  and, 
if  found  just,  the  power  and  influence  of  the  Federation  should  be 
exercised  to  effect  a  settlement.  If  that  proved  impossible,  the  sec- 
retary of  the  complaint  committee  should  be  notified  that  the  matter 
would  be  called  to  the  attention  of  the  Federation  at  its  annual 
meeting,  when  the  party  complained  of  could  appear  and  explain 
conditions. 

In  a  general  letter  issued  to  members  of  the  Western  association 
June  27,  1910,  the  secretary  stated  that  the  way  to  make  the  com- 
plaint department  most  effective  was  for  members  to  report  all 
irregular  sales  in  their  localities.  He  admitted  that  the  association 
was  not  always  successful  in  securing  adjustments  satisfactory  to 
members,  but  pointed  out  that  the  fact  that  if  a  report  was  made 
it  showed  that  the  association  was  on  the  alert.  He  asserted  that  a 
repetition  of  the  trouble  rarely  ever  occurred. 

In-  May,  1910,  the  United  States  Supreme  Court  handed  down  a 
decision  in  the  case  of  the  Grenada  Lumber  Co.  v,  the  State  of  Mis- 
sissippi (217  U.  S.,  433)  upholding  the  constitutionality  of  a  State 
statute  under  which  a  decree  had  been  rendered  by  the  Supreme 
Court  of  the  State  of  Mississippi  dissolving  a  voluntary  association 


\\\ 


160 


FABM-MACHINBEY  TBADE  ASSOCIATIONS. 


of  retail  lumber  dealers,  and  holding  that  an  agreement  not  to  pur- 
chase from  wholesale  dealers  who  sold  directiy  to  consumers 
amounted  to  a  restraint  of  trade  within  the  meanmg  of  the  antitrust 

statute  of  that  State.  i.     •      i 

This  decision  was  not  altogether  unexpected  to  the  implement 
dealers'  associations.    Immediately   after  it  had  been  announced 
dealers  belonging  to  the  associations  were  assured  in  the  Implement 
Dealers'  Bulletin  that  the  decision  did  not  in  any  way  affect  the 
associations  of  implement  and  vehicle  dealers  organized  under  the 
uniform  constitution  and  articles  of  association  prepared  by  the 
National  Federation,  under  which  rules  no  pledge  was  exacted  from 
members  not  to  patronize  those  who  sold  goods  to  mail-order  houses 
or  directly  to  the  consumer.    The  secretary  of  the  Federation  also 
advised  the  secretaries  of  the  various  constituent  associations  to  the 
same  effect  in  a  general  letter.    Apparently  the  situation  was  not 
free  from  some  doubt,  however,  because  in  this  letter  the  secretary 
of  the  Federation  expressed  the  belief  that  there  were  some  parts 
of  the  articles  which  it  would  be  advisable  for  the  association  to 
eHminate  at  their  next  convention.    Mention  of  the  specific  changes 
would  be  made  in  another  general  letter  after  the  Federation  had 
had  time  to  act  upon  the  matter. 

In  this  letter  the  secretary  of  the  Federation  also  referred  to  a  sug- 
gestion in  a  former  general  letter  made  immediately  after  a  court 
decision  in  Nebraska,  as  to  the  best  method  of  conducting  the  cor- 
respondence in  complaints,  namely,  to  the  effect  that  the  secretaries 
would  do  well  to  ask  jobbers  or  manufacturers  against  whom  com- 
plaints were  filed  if  they  desired  information  concerning  reports 
coming  to  the  secretaries  in  regard  to  shipments  which  they  had 
made  to  parties  who  did  not  seem  to  be  regular  dealers.  The  sec- 
retary of  the  Federation  assured  the  secretaries  that,  if  they  had 
such  a  request  for  the  information,  they  would  be  perfectly  safe  in 
prosecuting  the  case.  He  did  not  think  the  secretaries  would  ex- 
perience any  difficulties  in  receiving  affirmative  replies  from  all 
wholesalers.  He  advised  the  secretaries  to  file  these  replies  where 
they  could  be  easily  referred  to.    This,  he  said,  he  mentioned  simply 

as  a  safeguard. 

Prompted  by  the  decision  in  the  Mississippi  case,  the  delegates  at 
the  annual  convention  of  the  Federation  in  October,  1910,  recom- 
mended by  unanimous  vote  that,  as  a  precautionary  measure,  each 
association  amend  its  constitution  by  eliminating  the  article  relating 
to  members  reporting  direct  sales  to  the  secretary  of  the  association. 

(See  p.  187.) 

The  matter  was  brought  to  the  attention  of  each  of  the  s^retanes 
of  the  constituent  associations,  requesting  them  to  embody  this  recom- 


r 


4\ 
#   1     t 


BESTBIOTION  OF  BETAIL  TSABE  ID  BETAIL  DEALERS. 


161 


mendation  in  their  reports  to  the  conventions  of  their  associations. 
In  this  letter  the  secretary  of  the  Federation  said,  in  part : 

You  of  course  understand  that  the  Federation's  action  was 
simply  recommendatory.  The  associations  must  take  individual 
action,  but  this  should  be  done  in  executive  session. 

The  secretaries  were  asked  to  notify  the  secretary  of  the  Federa- 
ation,  whether  they  would  mention  this  matter  in  their  reports,  to 
withhold  it  from  the  press  and  to  notify  the  secretary  of  the  Federa- 
tion promptly  if  favorable  action  were  taken.  The  secretaries  were 
admonished  that  this  "  is  a  matter  of  great  importance." 

At  its  annual  convention  in  January,  1911,  the  Western  associa- 
tion made  the  recommended  changes  in  its  constitution.  Similar 
action  was  taken  by  the  other  associations  belonging  to  the  Fed- 
eration. 

At  the  convention  of  the  Western  association  held  at  Kansas  City 
in  January,  1911,  the  secretary  in  his  report  referred  to  the  matter 
of  direct  sales  as  follows: 

The  subject  of  direct  sales  by  manufacturers  and  jobbers  con- 
cerns you  perhaps  more  than  any  other.  It  is  an  evil  you 
have  to  combat,  and  only  by  presenting  a  solid  front  is  there 
hope  of  relief.  It  is  the  purpose  of  this  association  to  point 
out  to  the  wholesaler  that  to  solicit  the  trade  of  the  dealer  upon 
the  representation  that  he  does  not  sell  to  the  consumer,  then 
to  solicit  the  consumer's  trade,  is  not  fair.  We  concede  the  legal 
right  of  any  wholesaler  to  sell  direct  if  he  sees  fit,  but  we  in- 
sist that  to  be  fair  he  should  declare  his  policy  that  all  may 
know  it,  instead  of  claiming  to  be  the  dealer's  friend,  and  at 
the  same  time  making  an  occasional  direct  sale  and  giving  as 
an  excuse  that  he  supposed  the  customer  was  a  dealer.  Develop- 
ments during  the  year  made  it  seem  necessary  to  enter  a  general 
protest  against  direct  sales  if  we  were  to  stand  by  the  plank  in 
our  platform,  which  provides  that  to  the  retail  dealer  belongs 
the  retail  trade.  The  subject  was  carried  up  to  the  Federation, 
and  made  the  chief  subject  of  discussion  at  the  conference  held 
with  the  manufacturers'  committee  on  dealers'  associations.  The 
committee  admitted  the  justice  of  the  dealers'  position,  but  called 
attention  to  the  fact  that  many  manufacturers  felt  compelled  at 
times  to  place  their  goods  direct  in  order  to  introduce  them,  as 
dealers  will  not  buy  until  demand  is  created.  Consideration  of 
this  phase  of  the  subject  suggests  the  question  of  introductory 
price  and  making  all  deliveries  through  dealers.  The  phase  of 
this  direct  sales  subject  which  has  caused  your  officers  the  most 
annoyance  is  the  practice  of  withholding  commissions  to  force 
contracts,  not  paying  them  unless  agencies  can  be  established. 
Your  officers  take  the  position  that  this  is  unfair  and  on  a  par 
with  the  practice  of  a  class  of  wholesalers  who  make  no  pre- 
tensions to  protect  any  except  their  own  agents.  The  Federation 
carried  the  matter  up  to  the  manufacturers'  association,  and  it 
was  handled  by  that  association  in  a  spirit  of  fairness.    Reso- 

68248-— 15 ^11 


162  FABM-MACHINEBY  TRADE  ASSOCUTIONS. 

lutions  were  adopted  which  place  it  squarely  upon  record  as 
opposed  to  direct  sales.  With  this  explanation  of  the  reason  it 
was  deemed  best  to  revive  the  discussion  of  this  subject  at  this 
time,  I  leave  it  for  you  to  handle  as  you  deem  best 

There  was  considerable  discussion  of  this  subject  among  the  mem- 
bers. Dealers  with  grievances  of  this  sort  were  advised  from  the 
floor  by  other  members  to  take  the  matter  up  with  the  secretary  of 
the  association.  It  appeared  to  be  the  sentiment  of  a  number  of  the 
members  that  the  competition  of  mail-order  houses  was  not  nearly 
so  serious  as  the  matter  of  direct  sales  by  manufacturers  and  jobbers 
who  usually  sold  through  dealers.  An  effort  was  apparently  made 
to  have  the  members  realize  that  they  should  not  mention  in  the  dis- 
cussion the  names  of  any  concerns  that  they  thought  were  selling 
directly.  The  resolutions  committee  were  directed  to  bring  in  a 
strong  resolution  on  the  subject.    This  read  as  follows : 

That  direct  sales  to  consumers  by  jobbers  and  manufacturers 
who  seek  to  market  their  goods  through  the  retailers  are  not 
justifiable,  and  that  the  practice  should  be  wholly  discontinued. 

At  a  meeting  of  the  directors  of  the  Western  association  in  April, 
1911,  the  evidence  in  a  large  number  of  complaints  was  considered 
and  a  number  of  interviews  were  held  with  interested  parties.  It 
was  reported  that  a  majority  of  the  cases  were  adjusted  and  the  rest 
were  continued  pending  further  investigation.  It  developed  that 
some  of  the  complaints  had  been  filed  on  account  of  shipments  to 
the  complainant's  town,  which  the  evidence  showed  had  been  made 
upon  the  order  of  dealers  at  neighboring  towns.  Accordingly,  the 
directors  adopted  the  following  resolution : 

Inasmuch  as  a  great  amount  of  trouble  occurs  on  account  of 
dealers'  ordering  goods  shipped  direct  to  customers  in  neigh- 
boring towns,  causing  dealers  in  those  towns  to  complain  of 
the  shipments,  and  giving  to  those  who  contemplate  buying 
similar  articles  the  impression  that  they  can  buy  at  wholesale 
price  as  they  conclude  their  neighbors  have  done,  we  recommend 
that  our  members  have  all  such  shipments  consigned  to  them- 
selves, giving  their  customers  orders  on  the  railroad  agent  at 
destination  for  the  goods,  and  the  secretary  is  hereby  instructed 
to  take  the  subject  up  with  the  jobbers  of  Kansas  City  with  a 
view 'to  securing  their  endorsement  of  the  plan  and  their  assist- 
ance in  putting  it  into  effect. 

Later  in  the  year  the  secretary  of  the  Nebraska  association  called 
the  attention  of  the  secretary  of  the  Federation  to  the  wording  of 
certain  sections  of  the  articles  of  association  recommended  by  the 
National  Federation  for  adoption  by  local  clubs  of  dealers.  These 
sections  read  as  follows: 


m 


91 


k^ 


EESTKICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS.     163 

Article  III. 

PROTECTION. 

Section  I.  One  of  our  first  duties  will  be  to  stand  together 
and  join  with  other  association  workers  in  protecting  each  other 
against  irregular  sales  by  jobbers,  manufacturers  and  catalogue 
agents. 

Section  II.  Any  commissions  which  may  be  collected  on  such 
irregular  sales  in  our  territory  shall  be  turned  into  the  treasury 
of  the  Club,  and  used  for  entertainment  and  other  expenses  for 
the  benefit  of  all. 

The  secretary  of  the  Nebraska  association  stated  that  it  had  been 
called  to  his  attention  that  the  wording  of  the  lumbermen's  articles 
of  association  were  not  as  strong  as  these.  The  secretary  of  the 
Federation  immediately  replied  that  the  necessity  of  changing  these 
articles  had  been  entirely  overlooked  and  that  he  would  write  to  all 
the  secretaries  in  regard  to  this  matter  at  once. 

Another  letter  to  the  secretary  of  the  Nebraska  association  from 
the  secretary  of  the  Federation,  dated  August  18, 1911,  read,  in  part, 
as  follows : 

I  want  to  caution  you  about  the  manner  in  which  you  handle 
this  complaint  ^  to  all  others.  Recent  developments  have  shown 
the  necessity  for  using  care.  You  must  understand  that  no 
threats  can  be  made,  either  implied  or  direct,  and  even  if  you  do 
not  succeed  in  securing  an  adjustment  all  you  can  do  is  to  dismiss 
the  matter.  You  have  absolutely  no  recourse  under  the  law.  I 
have  tried  to  make  this  plain  to  all  of  our  secretaries,  and  I 
hope  they  thoroughly  understand  it,  and  that  none  have  made 
any  mistakes.  I  know  perfectly  well  what  the  temptation  is,  but 
you  must  remember  that  we  are  an  organization  of  business  men, 
and  are  not  law  breakers.  We  hope  in  the  near  future  to  have 
better  information  concerning  the  limit  to  which  we  can  go  in 
the  conduct  of  such  matters.  I  really  believe  that  in  this  case 
your  executive  committee,  when  it  meets  the  day  before  your 
convention,  can  secure  an  adjustment.  Possibly  it  can  be  done 
sooner. 

Government  investigation  of  protective  activities  of  associa- 
tions.— In  the  early  part  of  1911  a  series  of  questions  concerning  the 
work  of  the  federated  associations  was  propounded  to  the  secretary  of 
the  National  Federation  by  the  Bureau  of  Corporations.  This  was 
mentioned  by  the  secretary  of  the  Federation  in  a  letter  to  the  sec- 
retary of  one  of  the  constituent  associations  in  which  he  asserted 
that  as  soon  as  he  could  get  his  answers  to  the  Bureau  in  shape  they 
would  be  submitted  to  an  attorney  for  suggestions.  In  this  con- 
nection, he  said  in  part : 

I  mention  this  to  impress  upon  you  the  absolute  importance  of 
the  greatest  care  in  the  prosecution  of  your  complaint  depart- 

*  Evidently  referring  to  a  case  which  had  been  mentioned  in  previous  correspondence 
with  the  secretary  of  the  Nebraslca  associaUon. 


i 


164 


FARM-MACHINEKY  TBADE  ASSOCIATIONS. 


ment.    We  do  not  want  any  difficulty  such  as  the  lumber  sec- 
retaries are  having.    Recent  decisions  and  investigations  make 
it  hard  to  tell  just  where  we  are  "  at "  and  how  far  we  can  go  as 
none  of  us  desire  to  go  contrary  to  the  law. 
Writmg  to  another  secretary  a  few  days  later,  the  secretary  of 
the  Federation  expressed  the  opinion  that  the  main  thing  for  the 
Federation   to  take  up   was  how  the  associations  were  going  to 
furnish  protection  for  their  members  against  direct  sales  by  whole- 
salers and  yet  keep  within  the  bounds  of  the  law.    He  characterized 
this  is  a  hard  proposition  and  suggested  that  it  might  be  found  nec- 
essary for  the  dealers  to  consult  with  a  class  of  manufacturers  whom 
they  knew  to  be  interested  in  seeing  the  trade  protected  as  much  as 
the  dealers  were.    In  this  connection  he  stated  that  two  prominent 
officials  of  the  Federation  thought  that  the  annual  meeting  of  the 
Federation  in  the  latter  part  of  1911  should  be  held  the  same  we6k 
as  the  convention  of  the  manufacturers. 

About  this  time  a  representative  of  the  United  States  Department 
of  Justice  visited  the  office  of  the  secretary  of  the  National  Federation 
to  examine  its  records.  He  also  visited  the  office  of  the  secretary  and 
general  manager  of  the  National  Implement  &  Vehicle  Association. 
The  latter,  in  writing  to  the  secretary  of  the  dealers'  Federation, 
stated  that  he  had  given  this  representative  the  freedom  of  the  office 
of  the  association,  withholding  nothing,  and  that  he  had  endeavored 
unsuccessfully  to  learn  who  had  filed  complaint  with  the  Department 
of  justice,  but  presumed  that  it  was  some  disgruntled  concern  who 
found  they  could  not  "  straddle  the  fence  "  and  sell  both  the  dealers 
and  the  consumers  at  the  same  time.  He  stated  that  he  had  reported 
the  matter  to  the  chairman  of  the  National  Implement  &  Vehicle 
Association's  committee  on  dealers'  associations,  who  might  discuss 
it  at  the  Federation  meeting  in  October. 

In  replying  to  the  above  letter  the  secretary  of  the  Federation 
advised  the  secretary  of  the  manufacturers'  association  that  the 
latter  now  knew  the  main  reason  why  the  Federation  felt  it  neces- 
sary to  hold  its  meeting  at  the  same  time  that  the  manufacturers' 
association  held  its  convention.  (See  p.  168.)  The  secretary  of  the 
Federation  stated  that  he  had  withheld  nothing  from  the  (jovern- 
ment  representative.  In  this  letter  he  claimed  to  know  who  filed  the 
information  with  the  Department  of  Justice  in  the  first  place.  He 
went  on  to  say  in  part: 

If  we  can  not  conduct  our  association  along  the  lines  we  have 
been  pursuing  then  the  retail  dealers'  lease  of  business  life  is  not 
very  long.  There  has  never  been  a  report  sent  to  a  member  of 
the  Western  association,  nor  from  the  office  of  the  Federation, 
to  any  member,  concerning  any  jobber  or  manufacturer  who  has 
refused  to  protect  the  trade  as  we  felt  it  should  be  protected. 


/ 


M  l\ 


m 


BESTRICTION  OF  BETAIL  TBADE  TO  BETAIL  DEALEBS.     165 

When  we  have  been  unable  to  convince  them  that  our  position 
was  right  we  have  simply  had  to  drop  it.  The  party  who  filed 
the  information  is  one  of  those  who  could  not  be  convinced  and 
insisted  that  his  goods  should  be  marketed  direct  if  he  saw  fit. 
I  do  not  know  what  cause  he  has  for  thinking  that  any  boycott 
has  been  established  for  there  positively  has  not.  The  letters 
which  I  wrote  them  concerning  the  shipment  which  was  re- 
ported to  me  I  would  be  willing  to  let  anybody  see.  When  we 
could  not  secure  an  adjustment  of  the  matter  we,  as  stated 
before,  dropped  it.  I  undertook  to  have  a  friendly  interview 
with  this  party  during  your  St.  Louis  convention,  but  the  inter- 
view was  stopped  abruptly.  I  will  tell  you  more  when  I  see  you. 
This  letter,  my  friend,  is  not  for  your  files.  I  thank  you  for 
what  you  have  done.  I  can  not  feel  that  we  need  worry  over  the 
outcome.  We  have  not  pursued  such  methods  as  the  lumbermen 
are  reported  to  have  pursued. 

Under  date  of  September  16,  1911,  the  secretary  of  the  National 
Federation  wrote  the  secretary  of  the  Idaho  Retail  Hardware  &  Im- 
plement Dealers'  Association  as  follows: 

I  presume  you  know  that  nearly  all  retail  dealers'  associa- 
tions are  undergoing  an  investigation  at  this  time.  If  they  have 
not  reached  the  associations  on  the  Pacific  slope  it  is  only  be- 
cause they  have  been  too  busy  in  the  East.  It  is  hard  for  us  to 
know  how  far  we  can  go  in  this  association  work,  but  I  sincerely 
hope  the  question  will  be  cleared  up  before  very  long.  It  is 
coming  to  a  queer  pass  when  dealers  are  not  permitted  to  even 
advise  each  other  as  to  the  business  methods  of  others,  and  to 
consider  if  to  trade  with  them  is  best,  when  at  the  same  time  the 
big  concerns  who  are  clearly  violating  the  antitrust  laws  get  off 
without  the  slightest  molestation.  So  far  as  I  know  every  asso- 
ciation in  our  Federation  has  been  very  careful.  They  have 
never  used  the  boycott;  neither  have  they  ever  used  coercion 
in  any  form,  and  so  far  as  I  know  no  notices  have  ever  been  sent 
to  the  membership  of  any  violation  of  trade  rules  by  wholesalers, 
and  if  we  are  not  allowed  in  our  association  work  to  try  to  secure 
protection  through  our  members  against  direct  sales  by  per- 
suasion and  reasoning  then  we  are  indeed  in  a  sad  plight.  If 
you  are  in  Iowa  in  October  I  wish  you  could  attend  our  Federa- 
tion meeting.  It  will  be  held  in  Chicago  October  17,  18,  19 
and  20. 

Later  in  September,  the  secretary  of  the  Federation,  in  a  letter 
to  the  representative  of  the  Department  of  Justice  who  had  visited 
his  office,  explained  the  activities,  purposes,  and  methods  of  the 
organized  implement  dealers  as  follows: 

I  have  thought  best  to  send  you  a  complete  file  of  the  general 
letters,  except  number  one  to  five  exclusive  which  I  have  been 
unable  to  locate. 

In  this  conection,  it  may  be  well  for  me  to  briefly  explain  the 
subject  matter  of  some  of  the  letters  in  writing  along  the  lines 
heretofore  explained  orally. 


lil 


I 


166  FARM-MACHINERY  TRADE  ASSOCIATIONS. 

Number  18,  in  reference  to  a  list  of  catalogue  liouses,  refers 
to  an  effort  made  by  my  office  to  secure  such  a  list  so  that  I  might 
always  be  able  to  ascertain  at  once  whether  it  was  worth  while  to 
take  up  complaints.    I  could  not  know  all  the  manufacturers  and 
jobbers.    Sometimes  in  taking  up  a  complaint  with  an  imknown 
house,  upon  the.  supposition  that  their  policy  was  in  line  with 
that  of  the  trade  in  general  and  that  the  claim  might  therefore 
be  adjusted,  I  would  learn  that  I  was  wasting  effort  with  a  con- 
cern whose  fixed  policy  was  otherwise.  *  However  I  found  in 
an  effort  to  compile  this  list  that  it  was  so  extensive  as  to  make 
it  impossible  to  keep  it  complete  and  therefore  it  was  abandoned. 
Letters  19  and  20  pertain  to  the  information  bureau  which 
died  a  bornin',  except  the  maintenance  of  the  formal  organiza- 
tion.   A  great  many  members  had  expressed  a  desire  to  be  able 
to  ascertain  promptly  as  to  whether  any  given  manufacturer  or 
jobber,  practiced  the  policy  of  shipments  direct  to  consumers, 
and  possibly  some  other  information  that  I  do  not  recall  as  being 
so  desired.    We  were  advised  that  we  might  legally  compile 
such  information  and  furnish  to  those  who  requested  it;  but  that 
we  should  not  voluntarily  disseminate  such  information  gen- 
erally.   In  order  that  we  might  know  as  to  how  far  such  in- 
formation was  really  desired  and  to  give  all  our  members  equal 
opportunity  in  any  of  our  activities,  this  bureau  was  organized 
and  blanks  sent  to  the  members  for  signature  if  they  desired  to 
take  advantage  of  it.    The  conclusion  was  reached  that  work 
along  that  line  was  not  sufficiently  desired  or  desirable,  and  the 
idea  was  dropped  without  ever  being  put  into  operation. 

A  number  of  letters  refer  to  the  prosecution  of  complaints. 
As  I  have  explained  to  you,  the  association  has  endeavored  to 
benefit  its  members  and  secure  their  support,  adlierence  and  in- 
terest by  acting  as  an  intermediary  in  the  adjustment  of  com.- 
plaints.  It  has  always  been  the  theory  of  the  association  of 
which  I  have  been  secretary,  and  federation,  that  the  best  results 
could  be  obtained  upon  the  theory  of  cooperation  between  job- 
bers and  manufacturers  on  the  one  hand  and  dealers  on  the  other 
on  the  basis  of  mutuality  of  interest ;  that  they  desired  to  do 
business  under  advantageous  conditions  for  their  own  profit; 
and  that,  as  far  as  jobbers  and  manufacturers  are  concerned, 
they  generally  regard  the  local  dealer  as  the  best  medium  of 
distribution  and  that  a  local  dealer  who  prospered  through  good 
methods  distributed  more  goods  and  paid  his  bills  more 
promptly ;  so  that  it  was  to  their  mutual  interest  to  have  agree- 
able relations  and  methods  of  dealing  just  to  all  concerned.  On 
this  idea,  the  association  has  argued  general  principles  through 
its  conference  committees  and  handled  special  complaints 
through  its  secretaries,  using  such  arguments  and  persuasion  as 
it  thought  would  appeal  to  the  judgment  of  the  manufacturer 
and  jobber.  As  to  complaints,  it  has  believed  that  the  majority 
of  manufacturers  preferred  to  be  advised  of  and  to  adjust,  where 
equitable,  matters  tending  toward  irritation  of  the  local  dealer 
or  the  demoraHzation  of  his  business.  Complaints  of  local 
dealers  have  been  urged  vigorously  on  this  theory,  and  results 
sought  to  the  end  of  doing  justice  to  the  local  dealer  and  attach- 
ing him  to  the  association.    Where  (as  you  must  recall  from  the 


RESTRICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS.     167 

complaint  files  thrown  freely  open  to  you)  arguments  as  to 
mutual  interest  and  proper  trade  principles  did  not  avail, 
a  complaint  was  dropped  and  dismissed  and  the  member 
was  advised,  even  though,  as  we  regret  to  say,  we  have  suf- 
fered severely  in  our  membership  from  time  to  time  because 
the  members  whose  complaints  were  not  adjusted  felt  that  non- 
adjustment  was  due  to  failure  of  the  association  to  take  a  more 
vigorous  stand.  Not  only  has  the  association  of  which  I  am 
a  member  abstained  from  any  suggestion  to  wholesalers  other 
than  appeals  to  their  good  judgment  and  sense  of  trade  equity, 
but  the  federation  has  cautioned  the  secretaries  of  other  con- 
stituent associations  not  to  do  so,  not  only  because  of  doubtful 
legality  but  because  it  was  not  good  business  policy.  See  letter 
of  March  4,  1908,  a  copy  of  which  was  made  for  you  when  you 
were  in  Abilene  but  which  you  in  some  way  overlooked  in  get- 
ting the  large  amount  of  data  together. 

You  asked  me  in  reference  to  our  reporting  to  our  members 
though  circulars  or  constituent  associations,  or  even  by  furnish- 
ing information  to  certain  papers,  wholesalers  whose  methods 
did  not  accord  with  the  judgment  of  the  federation  as  to  business 
policy.  We  have  never  done  anything  of  that  kind.  The  only 
instance  in  which  we  have  taken  any  action  in  such  a  matter 
was  to  correct  a  wrong  I  believed  was  being  done  to  manufac- 
turers and  is  found  in  letter  34.  Inquiries  indicated  that  the 
Banner  Buggy  Company  had  been  misrepresented  in  a  trade 
paper,  and  we  did  what  we  could  and  what  we  thought  was  right 
to  all  parties,  to  correct  what  we  believed  to  be  a  false  report, 
although  I  had  had  no  correspondence  regarding  the  matter  pre- 
viously, and  in  fact,  knew  nothing  regarding  it  until  my  atten- 
tion was  called  to  the  report  in  the  paper. 

Sometimes  in  expressing  in  correspondence  a  thought  per- 
fectly clear  to  the  writer,  the  thought  as  expressed  is  not  per- 
fectly clear  to  the  one  not  viewing  the  language  from  the  point 
of  view  of  the  writer's  conception  of  the  subject.  If  there  is 
anywhere  in  any  of  these  communications  anything  that  you  do 
not  understand  clearly,  it  will  give  me  pleasure  to  endeavor  to 
make  it  clear  upon  any  request  from  you. 

And  this  suggests  to  me  that  I  repeat  here  the  request  made  to 
you  orally  that  in  making  your  report,  you  embody  a  request 
from  us  that  we  be  advised  what,  if  anything,  in  the  constitution 
or  operation  of  our  federation  the  department  regards  as  im- 
proper in  any  way,  so  that  we  may  make  proper  corrections. 
We  have  operated  on  the  theory  that  there  was  a  legitimate  field 
for  furthering  the  mutual  interest  of  wholesale  and  retail  dealers 
in  building  up  the  business  along  the  best  lines  for  all  concerned 
by  improving  methods,  exchanging  information  and  opinions 
upon  matters  of  general  interest  and  as  to  specific  cases.  If 
there  is  any  particular  in  which  we  have  exercised  bad  judgment 
in  seeking  to  attain  that  general  purpose  or  in  specific  niethods 
adopted,  there  is  nobody  more  anxious  to  be  advised  of  it  than 
ourselves. 
The  secretary  of  the  Iowa  implement  dealers'  association  referred 
to  the  investigation  of  the  Department  of  Justice  in  a  letter  written 


I  r 


168 


FABM-MAOHINERY  TBADE  ASSOCIATIONS. 


it 


II 


to  the  secretary  of  the  Federation  October  6, 1911,  in  which  he  said 
in  part : 

I  don't  fear  for  the  results  as  I  know  that  we  have  been  as 
careful  as  it  is  possible  to  be.  I  think,  however,  that  this  situa- 
tion should  be  presented  in  detail  and  should  be  gone  over  care- 
fully at  the  Federation  meeting,  in  order  that  the  situation  may 
be  presented  intelligently  by  the  delegates  to  the  various  organi- 
zations in  annual  convention.  If  the  rank  and  file  have  a  clear 
understanding  of  the  situation  matters  can  be  handled  much 
better. 

The  secretary  of  the  Federation  in  his  reply  stated  that  he  felt  that 
what  they  had  to  fear  was  the  overanxiety  of  some  official  to  make  a 
record.    He  asserted: 

We  have  been  as  careful  as  any  one  could  be  and  if  we  are  not 
permitted  to  conduct  our  work  as  we  have  done  then  we  will 
have  to  disband  and  let  the  mail  order  houses  take  the  business. 

Just  before  the  convention  of  the  National  Implement  &  Vehicle 
Association  and  the  annual  meeting  of  the  Federation  in  October, 
1911,  the  secretary  of  the  latter  wrote  the  chairman  of  the  commit- 
tee on  dealers'  associations  of  the  National  Implement  &  Vehicle 
Association  in  reply  to  a  letter  from  the  former,  suggesting  a  date 
for  a  conference  between  the  manufacturers'  committee  and  the  Fed- 
eration at  that  time.  In  his  reply  the  secretary  of  the  Federation 
stated  as  follows : 

I  do  not  know  that  we  have  anything  special  to  take  up  with 
your  committee  except  the  all  important  subject  about  which  I 
wrote  you  recently  and  which  will  be  the  chief  topic  for  dis- 
cussion at  our  meeting.  Upon  the  outcome  depends  the  very 
life  of  associations.  I  do  not  believe  that  the  class  of  manufac- 
turers who  want  to  market  their  product  through  the  dealers 
want  to  see  such  chaotic  conditions  prevail  as  would  if  no  re- 
straint whatever  is  thrown  around  the  business. 

•  When  the  delegates  to  the  Federation  met  at  Chicago  October  17, 
1911,  the  president  in  his  address  suggested  that  the  existing  agita- 
tion against  the  middleman  had  resulted  in  making  the  implement 
dealers  cautious,  and  that  the  results  of  Government  investigation 
and  the  action  of  the  governmental  authorities  in  dissolving  and  re- 
adjusting many  of  the  large  corporations  were  such  as  to  make  the 
dealers  scarcely  know  where  they  stood.    In  this  connection  he  said : 

We  find  that  it  is  almost  against  the  law  to  meet  and  to  consult 
together  and  talk  over  matters. 

He  was  of  the  opinion  that  the  talk  against  the  middleman  was  for 
political  purposes.    He  said : 

The  real  fact  is  that  a  selling  organization  is  very  necessary 
in  order  to  market  various  products  in  this  country  and  results 
often  in  advantage  to  the  consumer  as  well  as  a  higher  price 
to  the  producer. 


i 


W~^^€ 


BESTRICTION  OF  RETAIL  TBADE  TO  RETAIL  DEALERS.     169 

One  of  the  principal  matters  discussed  at  the  meeting  was  the  sub- 
ject of  direct  selling  and  whether  the  retail  dealer  is  a  necessary 
part  of  the  machinery  of  distribution.  This  was  discussed  before 
the  arrival  of  the  manufacturers'  committee,  the  opinion  of  the  deal- 
ers present  being  that  the  manufacturers  should  recognize  the  dealer 
as  the  proper  medium  of  distributing  their  goods.  When  the  manu- 
facturers arrived  this  was  one  of  the  subjects  presented  to  them  by 
one  of  the  dealers  present.  In  replying  one  of  the  manufacturers 
stated  that  the  manufacturers  and  dealers  should  cooperate  and  that 
the  manufacturer  should  protect  the  dealer  against  direct  selling 
as  far  as  possible.  Another  manufacturer  took  the  position  that  the 
existence  of  the  retail  dealer  is  absolutely  essential  to  the  existence 
of  the  small  manufacturer,  and  if  the  retail  dealer  should  go  out 
of  business  the  small  manufacturer  would  be  compelled  to  do  the 
same.  The  same  manufacturer  in  addressing  a  meeting  of  the  Illi- 
nois implement  dealers  on  the  same  subject  had  spoken  as  follows : 

Men,  I  want  to  tellyou  that  we  are  on  trial  as  retail  implement 
men  before  the  public,  as  to  whether  or  not  there  is  a  necessity 
for  our  existence.    The  question  to  be  decided  is,  as  middlemen, 
have  we  imposed  a  cost  of  doing  business  that  is  too  big  a  bur- 
den for  our  business  to  bear?    Is  there  a  cheaper  method?    If 
there  is,  and  if  that  method  is  equally  efficient,  you  may  be  just 
as  sure  as  that  you  sit  here  that  the  extravagant  plan  must  go. 
This  is  a  question  which  is  not  alone  one  of  economics,  but 
which  is  likely  to  be  as  well  one  of  politics.    What  we  lack  is 
the  means  for  an  organized  effort  to  combat  the  antimiddleman 
publicity. 
The  chairman  of  the  manufacturers'  committee  on  dealers'  asso- 
ciations and  arbitration,  in  reporting  to  the  manufacturers  the  pro- 
ceedings at  the  conference  of  that  committee  with  the  dealers'  Fed- 
eration, affirmed  that  the  members  of  the  National  Implement  & 
Vehicle  Association  believed  in  the  desirability  of  confining  the  retail 
trade  to  the  retail  dealer  as  the  best  method  of  distributing  goods. 
He  said  in  part : 

Now  while  we  can  all  agree,  that  the  necessary  factors  in  a 
practical  and  successful  implement  business,  are  the  factory, 
the  traveling  salesman,  or  the  jobber  and  the  retail  dealers,  yet 
we  must  recognize  that  there  is  strong  opposition  to  this  plan. 

For  years,  the  mail  order  houses  and  the  direct  selling  fac- 
tories have  tried  to  impress  the  farmers  with  the  advantage  of 
buyin^y  from  them,  but  they  have  not  been  so  very  successful. 

JLn  tlie  past  two  years,  the  mail  order  houses  have  bought  some 
implement  factories,  and  are  controlling  others.  They  will  there- 
fore make  further  and  somewhat  more  plausible  representations 
to  the  consumers.  Their  chief  argument  is,  that  they  cut  out  the 
dealer,  and  give  consumers  the  benefit  of  his  profit.  In  some  in- 
stances they  make  a  specially  low  price  on  some  one  implement, 
and  thus  try  to  convince  the  farmer  of  their  ability  and  resources 


170 


PAKM-MACHINERY  TRADE  ASSOCIATIONS. 


ii 


1). 


1 ' 


1 1 


on  other  things.  Kecently  some  State  prisons  have  been  trying 
to  make  twine  and  implements. 

Then,  more  recently,  we  have  heard  of  the  "  Anti-Middle  Man 
Association,"  and  of  those  who  say  they  "  don't  want  anybody 
between  them  and  the  producer."  And  recently,  the  Department 
of  Justice,  doubtless  at  the  suggestion  of  the  mail  order  houses, 
has  been  investigating  the  dealers'  associations,  to  see  if  they  have 
been  guilty  of  any  illegal  acts. 

In  short,  there  is  quite  a  widespread  inquiry  as  to  the  neces- 
sity and  advantage  of  various  methods  of  conducting  business; 
and  this  has  reached  the  implement  industry.  Our  methods  are 
on  trial,  not  only  the  factory  methods,  but  the  dealers  as  well. 

In  other  words,  the  present  methods  of  conducting  the  imple- 
ment business  are  up  for  consideration,  and  we  have  to  prove  the 
*  wisdom,  the  efficiency  and  the  economy  of  our  distributing  sys- 
tem, if  it  is  to  be  continued. 

So  that  in  our  opinion,  we  as  manufacturers,  must  closely 
scrutinize  our  own  part  in  this  system,  cut  out  all  unnecessary 
expense,  stop  all  leaks  and  waste,  and  get  down  to  bed  rock  in 
our  costs  oi  making  and  selling;  and  the  dealer  must  do  the 
same ;  handling  suflicient  lines  to  keep  him  busy  all  the  year 
round,  and  have  actual  knowledge  of  what  it  costs  him  to  do 
business — then  have  the  courage  to  add  to  this  baying  price,  and 
make  a  profit  besides. 

There  must  be  the  closest  kind  of  cooperation  between  dealers 
and  factories,  in  a  serious  and  continuous  effort  to  reduce  the 
cost  of  distribution  to  the  consumer;  and  at  the  same  time,  we 
will  have  the  advantage  of  furnishing  the  farmer,  by  far  the 
best  machines  he  can  get,  of  being  on  the  ground  to  take  care  of 
-him  when  in  trouble,  and  of  the  personal  acquaintance  and 
friendship  between  farmers  and  dealers. 

The  members  of  the  National  Implement  &  Vehicle  Association  at 

this  time  adopted  the  following  resolution  on  the  subject  of  retail 

dealers'  associations: 

Whereas,  The  policy  of  the  members  of  this  association  is  to 
market  their  product  through  the  retail  dealers,  and 

Whereas,  The  retail  implement  dealers'  associations  are  con- 
stantly working  for  the  improvement  of  the  conditions  of  their 
members, 

Therefore,  he  it  resolved,  That  this  association  heartily  en- 
dorses the  general  policy  of  the  retail  implement  dealers'  asso- 
ciatipns,  and  the  National  Federation  of  Retail  Implement  and 
Vehicle  Dealers'  Associations,  and  will  continue  to  cooperate 
with  them  in  all  legitimate  efforts  to  improve  the  condition  of 
the  trade  and  through  the  dealers  to  supply  the  farmers  with  the 
best  farm  implements  and  equipment  in  the  world,  and  at  the 
lowest  practical  cost  consistent  with  first-class  implements  and 
constant  improvements.  " 

The  Federation  in  its  resolutions  reaffirmed  its  position  that — 

"To  the  retail  dealer  belongs  the  retail  trade."  The  live, 
honest,  energetic,  retail  implement,  vehicle  and  hardware  dealer 
is  the  best  friend  the  farmer  ever  had.    By  reason  of  his  location 


r 


RESTRICTION  OP  RETAIL  TRADE  TO  RETAIL  DEALERS. 


171 


»  t'4 


and  experience  he  is  qualified  to  render  to  his  customer  such 
services  as  can  be  had  through  no  other  channel  and  from  no 
other  source.  By  such  service  to  his  community  he  has  well 
earned  the  position  which  he  is  proud  to  maintain.  The  retail 
dealer  is  the  connecting  link  between  the  manufacturer  and  con- 
sumer. His  facilities  for  taking  care  of  the  manufacturer's  in- 
terest and  of  rendering  practical  service  to  the  consumer  make 
him  the  natural  and  by  far  the  most  economical  channel  for  the 
distribution  of  manufactured  products. 

We,  therefore,  reaffirm  our  position  that  "to  the  retail  dealer 
belongs  the  retail  trade,"  and  maintain  that  the  manufacturer 
who  solicits  the  trade  of  retail  dealers  should  afford  them  loyal 
and  adequate  protection  in  the  sale  of  his  goods. 

"•^  Shortly  after  this  meeting  of  the  Federation  and  its  conference 
with  the  manufacturers'  committee,  the  secretary  of  the  Federation 
replied  to  a  letter  from  the  publisher  of  an  implement  trade  paper 
who  had  apparently  inquired  concerning  the  situation.  In  his  reply 
the  secretary  said,  in  part,  as  follows: 

Answering  your  inquiry  concerning  the  investigation  will  say 
that  nothing  new  has  developed.  A  special  agent  of  the  Depart- 
ment of  Commerce  and  Labor  attended  every  session  of  our  con- 
vention, also  every  session  of  the  manufacturers'  convention,  and 
we  were  glad  to  give  him  permission  to  do  this.  We  talked  just 
as  freely  regarding  matters  connected  with  our  work  as  we 
would  had  he  not  been  there,  for  we  have  nothing  to  keep  back. 
We  have  committed  no  act  in  violation  of  law.  We  have  an- 
tagonized no  one,  and  have  been  doing  as  we  supposed  and  still 
think  just  as  our  friends  the  jobbers  wanted  us  to  do,  namely 
cooperating  with  them  in  an  effort  to  place  the  implement  busi- 
ness upon  a  better  basis.  How  veil  we  have  succeeded  is  evi- 
denced by  the  loyalty  of  a  large  membership  and  the  endorse- 
ment of  our  methods  by  a  great  number  of  jobbers  and  by  the 
manufacturers  in  a  strong  resolution  adopted  unanimously  at 
their  recent  convention. 

We  are  very  grateful  to  those  who  very  promptly  responded 
to  our  request  for  a  letter  setting  forth  the  fact  that  our  associa- 
tion had  been  conducted  along  conservative  lines  and  had  been 
a  real  help  to  all  classes  of  the  implement  trade  and  that  they 
were  in  sympathy  with  us  and  approved  of  our  methods.  It 
is  also  gratifying  to  note  the  willingness  shown  by  the  manu- 
facturers to  respond,  and  the  character  of  the  letters  they  have 
written  should  dispel  any  thought  in  the  minds  of  Government 
officials  that  the  manufacturers  felt  that  we  were  antagonizing 
them  in  the  slightest  degree. 

It  is  true  that  I  have  written  to  a  number  of  jobbers,  and  in- 
terviewed others,  requesting  a  letter  setting  forth  the  fact  that 
it  is  their  desire  that  implement  dealers'  associations  be  allowed 
to  continue  their  work  along  lines  which  have  characterized  it  in 
the  past.  This  was  first  suggested  to  our  board  of  directors  by  a 
letter  written  by  one  of  the  largest  jobbers  in  Kansas  City. 
Hearing  of  this  I  asked  for  a  copy  of  same,  and  it  set  forth  so 
forcibly  the  contention  we  ourselves  had  made  that  I  brought  it 


i 


172 


FABM-MAGHINERY  TBABE  ASSOCUTIOITS. 


11^ 


to  the  attention  of  the  hoard  of  directors,  and  the  advisability 
of  securing  other  letters  of  similar  character  was  then  suggested. 
We  assumed  of  course  that  all  would  be  as  willing  as  this  jobber 
had  been  to  do  this,  and  as  before  stated,  I  have  received  a  great 
number  of  very  fine  letters  which  can  not  but  fortify  the  posi- 
tion we  have  taken. 

Plan  of  handling  oomflaints  in  isii  and  1912. — After  the 
decision  of  the  dealers  to  eliminate  certain  portions  of  the  uniform 
articles  of  association  imder  which  the  constituent  associations  (see  p. 
160)  had  been  organized,  the  secretary  of  the  Federation,  in  a  letter 
to  the  secretary  of  the  New  York  Ketail  Implement  &  Vehicle  Dealers' 
Association,  stated  that  all  of  the  other  State  associations  had  elimi- 
nated all  of  article  6  (see  p.  161) ,  as  the  officials  did  not  want  anything 
in  the  association  work  that  was  in  the  slightest  degree  in  conflict  with 
the  antitrust  law.  He  cautioned  the  secretary  of  the  New  York  asso- 
ciation that  reports  of  irregularities  sent  to  members  were  not  per- 
missible, and  asserted  that  in  the  23  years  which  he  had  been  in  the 
work  (as  secretary  of  the  Western  association,  part  of  the  time  as 
secretary  of  the  National  Federation)  he  had  never  notified  the 
membei^ip  of  irregularity  in  the  conduct  of  the  business  of  any 
manufacturer  or  jobber.    He  continued  as  follows : 

In  prosecuting  complaints  we  simply  try  to  make  the  whole- 
saler see  that  the  dealers  need  their  protection.  The  law  has 
been  such  that  we  could  not  use  any  coercion  and  we  must  recog- 
nize that  fact.  This  undoubtedly  has  been  a  handicap  to  you 
and  to  all  other  secretaries,  but  nevertheless  it  must  be  observed. 

The  question  of  the  best  method  to  be  used  in  handling  complaints 
was  brought  up  a  little  later  ii^a  letter  to  the  secretary  of  the  Federa- 
tion from  the  secretary  of  the  Minnesota  association,  in  which  he 
wrote  as  follows: 

I  wish  your  advice  in  inserting  the  following  in  our  conven- 
tion program.  I  ask  this  in  view  of  the  investigation  now  being 
made  of  our  associations. 

"Important. — ^The  arbitration  committee  will  be  in  session 
in  their  committee  room,  adjoining  convention  hall,  for  the  pur- 
pose of  hearing  complaints  from  any  member.  No  complaints 
or  grievances  will  be  allowed  on  the  floor  of  the  convention. 
The  arbitration  committee  will  hear  your  trouble  and  report  it 
.    to  the  convention  in  executive  session,  Friday  afternoon." 

I  wish  to  head  off  any  attempts  on  the  part  of  our  members  to 
air  their  grievances  during  an  open  session  of  the  convention 
and  further  to  handle  the  matter  entirely  through  our  arbitra- 
tion comimittee. 

A  prompt  reply  is  earnestly  requested  as  I  am  now  at  work 
on  our  convention  program. 

To  this  letter  the  secretary  of  the  Federation  replied  as  follows : 

I  am  in  receipt  of  yours  of  24th  and  replying  will  say  that  if 
I  were  in  your  place  I  believe  I  would  say  nothing  about  the 


\ 


M 


|l,. 


BESTRIOTION   OF   RETAIL  TRADE  TO  RETAIL  DEALERS.  173 

work  on  the  arbitration  committee.  If  you  put  this  on  your 
program  you  may  be  reasonably  certain  that  a  representative  of 
the  Department  will  be  on  hand  and  will  ask  you  the  privilege 
of  attending  all  of  your  sessions,  including  the  executive  ses- 
sion. *  *  *  You  are  absolutely  right  about  not  allowing 
any  grievances  to  be  discussed  on  the  floor  of  the  convention. 
If  you  want  to  say  on  your  program  that  the  board  of  directors 
will  be  in  session  at  a  certain  time  and  if  members  have  any 
matters  they  wish  to  take  up  with  them  that  is  the  time  to  do  it, 
I  can  see  no  objections,  but  I  would  not  say  that  the  committee 
will  make  a  report  in  executive  session.  You  might  just  as  well 
print  it  so  far  as  the  position  the  Government  will  take  is  con- 

cerned. 

I  believe  I  am  right  about  this,  Mr.  Buxton,  but  if  you  think 
I  am  not  and  will  point  out  wherein  you  think  I  am  wrong  I 
will  be  more  than  glad  to  hear  from  you.  We  would  better  be 
too  careful  during  these  parlous  times  than  not  careful  enough. 
I  heard  when  in  Kansas  City  this  week  that  the  cases  against 
the  lumber  secretaries  had  been  dismissed.  I  notice  by  the  daily 
papers  that  they  have  filed  their  case  against  the  lumber  asso- 
ciations in  Minnesota.  If  you  can  secure  any  information  I  will- 
be  glad  to  have  you  write  me. 

The  policy  which  the  secretary  thought  the  associations  should' 
pursue  in  their  efforts  for  protection  was  indicated  in  a  letter  to  a 
member  of  the  Western  association  in  December,  1911.    In  this  letter 
the  secretary  said  in  part : 

Our  association  can  not  change  the  policy  of  any  manufac- 
turer. Its  province  is  to  ascertain  what  said  policy  is,  but  we 
can  not  compel  them  to  pay  anyone  a  commission  upon  any 
direct  sale  they  are  pleased  to  make.  *  *  *  I  want  to  call 
your  attention  to  the  fact  that  matters  of  this  kind  must  be 
handled  in  such  a  way  as  not  to  lay  us  liable  in  any  way  under 
the  antitrust  laws  and  I  have  conducted  the  affairs  of  this  office 
in  that  way  from  the  start  and  do  not  propose,  if  I  can  help  it, 
to  put  myself  in  the  position  that  some  of  the  secretaries  in  other 
lines  have  done.  I  expect  to  meet  the  manager  of  the  *  *  ♦ 
Wagon  Company  in  Kansas  City  during  convention  and  believe 
that  if  it  were  possible  to  arrange  an  interview  between  you  and 
him  we  could  get  this  adjusted  very  quickly.  At  any  rate,  I 
want  the  opportunity  of  explaining  to  you  just  how  far  we  can 
go  in  such  matters.  I  repeat  that  if  it  is  their  policy  to  sell 
their  goods  direct,  we  can  not  compel  them  to  change  it.  Write 
me  if  you  will  meet  me  at  the  convention. 

During  the  summer  of  1912  the  secretary  of  the  Western  associa- 
tion, who  was  also  secretary  of  the  National  Federation,  in  an  oral 
statement  to  an  agent  of  the  Bureau  of  Corporations,  defined  the 
manner  in  which  complaints  against  individual  manufacturers  and 
wholesalers  were  then  being  handled  by  the  association.  He  stated 
that  when  a  complaint  was  received  from  a  member  of  the  Western 
association  in  regard  to  sales  to  an  irregular  dealer  or  directly  to  a 


174 


FABM-MACHINEBY  TKADE  ASSOCIATIONS. 


F» 


fii 


consumer  the  usual  method  was  for  the  secretary  of  the  association 
first  to  attempt  £o  settle  the  matter  by  correspondence  with  the 
offending  manufacturer  or  jobber.  The  secretary  wrote  asking  if 
he  wished  to  receive  information  concerning  complaints  which  might 
be  lodged  with  the  secretary  regarding  his  methods  of  selling.  The 
reply  of  the  jobber  or  manufacturer  was  usually  that  he  would  be 
glad  to  have  such  information.  Thereupon  the  secretary  stated  the 
case,  and  if  the  matter  could  not  be  adjusted  by  correspondence  it 
was  taken  up  at  a  meeting  of  the  board  of  directors  of  the  Western 
association,  at  which  meeting  the  manufacturer  or  jobber  was  re- 
quested to  be  present  to  state  his  policy.  According  tc  the  secretary, 
if,  at  this  meeting,  the  jobber  or  manufacturer  said  that  it  was  his 
policy  to  sell  to  anyone  who  would  buy,  the  board  of  directors  at  once 
considered  him  a  direct  seller.  If  he  announced  his  policy  to  be  one 
of  protection  to  dealers,  the  matter  was  adjusted  either  by  his  paying 
a  commission  to  the  dealer  in  whose  territory  the  sale  was  made,  or 
sometimes  dropped,  upon  an  agreement  of  the  offender  to  discontinue 
such  sales.  A  great  majority  of  the  complaints  related  to  irregular 
dealers.  A  case  which  could  not  be  settled  by  the  board  of  directors 
was  referred  to  the  Federation,  but  the  secretary  stated  that  these 
cases  had  been  few.  In  this  connection,  he  asseited  that  the  secre- 
taries of  the  constituent  associations  referred  to  the  Federation  only 
those  cases  which  involved  some  important  principle^  as  the  Federa- 
tion took  the  position  that  it  had  something  else  !<.•  attend  to  than  the 
specific  complaints  of  individual  dealers. 

Furthermore,  the  secretary  stated  that  the  only  place  where  the 
dealer  could  air  a  grievance  against  a  particular  manufacturer  or 
jobber  was  at  executive  sessions  of  the  association,  but  he  claimed 
that  these  sessions  had  been  discontinued  by  the  Western  association. 
He  stated  that  the  purpose  of  the  executive  session  had  been  to  let 
the  dealers  know  who  were  loyal  to  them.  He  stated  that  the  last 
executive  session  of  the  Western  association  was  held  in  1909  or 
1910,  although  it  has  been  on  the  program  since  that  time.  In  such 
session  the  secretary  reported  the  number  of  complaints  and  usually 
the  name  of  the  manufacturer  or  jobber  involved.  The  secretary  de- 
clared that  he  had  never  in  open  session  given  members  the  names 
of  direct-selling  concerns  as  a  matter  of  general  information,  but  in 
the  executive  sessions  there  was  no  such  limitation.  He  asserted, 
however,  that  in  recent  years  the  executive  sessions  have  been  given 
less  and  less  to  the  matter  of  specific  complaints,  as  the  dealers  feel 
that  they  have  won  their  point  and  that  in  very  few  instances  do 
manufacturers  and  jobbers  sell  directly.  He  claimed  that  very 
rarely  did  a  manufacturer  or  jobber  appear  before  the  executive  ses- 
sion, most  of  the  work  of  adjusting  complaints  being  done  by  the 
board  of  directors  of  the  Western  association  meeting  with  indi- 


BESTRICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS.     l75 

vidual  manufacturers  or  jobbers  to  talk  over  the  complaint.  The 
great  bulk  of  complaints  which  the  secretary  could  not  settle  by  cor- 
respondence was  adjusted  in  this  way.  The  secretary  asserted  that 
the  statement  could  not  be  made  too  strong  that  he  had  at  no  time 
supplied  data  to  implement  trade  papers  concerning  direct  selling. 

The  secretary  denied  that  the  association  had  ever  attempted  to 
limit  sales  by  wholesalers  only  to  members  of  the  association,  any 
regular  dealer  being  recognized  as  entitled  to  wholesale  prices  from 
the  jobber  or  manufacturer.  He  said  that  the  association  had  never 
attempted  to  prevent  a  new  dealer  from  going  into  business  pro- 
vided he  proposed  to  carry  a  stock  and  make  his  living  from  the 
business.  It  was  the  man  who  sells  from  a  catalogue,  who  does  not 
expect  to  make  any  profit  on  his  goods,  that  the  association  objected 
to.  In  this  connection,  he  expressed  the  belief  that  the  antitrust 
laws  should  be  amended  so  as  to  permit  the  secretary  of  a  dealers' 
association  to  notify  all  of  its  members  in  regard  to  direct  sales  by 
certain  manufacturers.  (See  p.  202.)  He  claimed  that  all  that  could 
be  done  under  existing  law  was  to  notify  the  individual  dealer  who 
inquired  as  to  the  selling  methods  of  the  manufacturer  or  jobber  in- 
quired about,  or  to  reply  to  a  question  from  a  manufacturer  or  jobber 
as  to  the  standing  of  certain  concerns  said  to  be  dealers. 

Negotiations  with  manufacturers  relative  to  farmers'  coopera- 
tive STORES. — ^The  method  of  handling  complaints  by  the  Minnesota 
association  in  1911  (see  p.  172)  is  shown  in  the  case  of  a  complaint 
filed  with  the  secretary  of  that  association  by  a  member  who  reported 
that  a  wholesale  house  at  Minneapolis,  whose  name  was  given,  had 
made  a  shipment  of  certain  specified  implements  to  a  store  conducted 
at  his  town  as  a  farmers'  cooperative  enterprise.  This  member  wrote 
the  secretary  of  the  Minnesota  association  as  follows : 

Kindly  take  this  up  at  once  with  the  above  named  firm  and 
cut  such  business  methods  short,  while  still  in  its  infancy. 
There  is  no  reason  they  can  offer  for  making  such  shipment,  as 
the  above  concern  at  this  place,  receiving  the  goods,  handle  only 
groceries  and  dry  goods.  I  trust  you  will  be  successful  in  getting 
the  *  *  *  Co.  to  see  the  error  of  their  ways,  and  that  we 
may  have  no  further  trouble  from  this  source. 

The  secretary  acknowledged  the  receipt  of  this  letter  and  appears 

to  have  followed  the  advice  of  the  secretary  of  the  Federation  in 

opening  correspondence  with  the  wholesaler  by  asking  if  the  latter 

desired  to  know  of  complaints  filed  against  him.    The  secretary  wrote 

as  follows: 

I  frequently  receive  information  from  members  of  this  asso- 
ciation concerning  shipments  made  to  their  towns  by  wholesalers 
to  parties  who  carry  no  stock  of  implements  or  vehicles  what- 
ever, which  they  have  reason  to  believe  were  made  under  a 
misapprehension  of  th3  facts,  and  I  would  like  to  know  if  you 
wish  us  to  advise  you  when  such  information  concerns  you. 


176 


FABM-MACHINEBY  TBADE  ASSOCIATIONS. 


I 


I 


» 


The  reply  of  the  manager  of  the  wholesale  house  at  Minneapolis, 
dated  March  10,  read  as  follows: 

Keplying  to  your  favor  of  March  8,  we  shall  consider  it  a 
favor  if  you  will  notify  us  of  any  cases  where  we  are  shipping 
machinery  under  a  misapprehension  as  to  the  propriety  of  so 

doin[^. 

It  is  our  aim  to  sell  nothing  but  the  best  class  of  dealers  as 
we  feel  that  it  is  as  much  to  our  own  interest  as  to  that  of  the 
trade,  to  discriminate  closely. 

Thereupon  the  secretary  of  the  dealers'  association  wrote  as  fol- 
lows : 

Answering  your  letter  of  the  10th  inst.,  I  find  that  you  have 
made  a  shipment  of  the  following  goods:  One  checkrow  com 
planter,  one  boss  harrow,  two  walkmg  plows,  to  the  Farmers 
Co-op  Merc.  Co.,  of    *    *    * 

The  Farmers  Co-op  Merc.  Co.  of  *  *  *  are  not  imple- 
ment dealers,  and  it  is  to  be  assumed  that  these  goods  were 
ordered  through  this  company  for  one  of  the  farmers  interested 
in  the  Merc.  Co. 

The  Farmers  Co-op  Co.  of  *  *  *  handles  only  groceries 
and  dry  goods,  and  the  fact  that  the  shipment  was  so  small  indi- 
cates tnat  they  have  no  intention  of  engaging  in  the  implement 
business.  I  find  that  where  farmers'  elevators  and  stores  are  in 
operation,  the  members  of  this  association  often  endeavor  to 
secure  implements  at  wholesale  by  getting  the  manager  of  the 
company  to  order  these  for  them. 

I  must  say  that  the  Minneapolis  jobbers  as  a  rule,  refuse  to 
fill  these  orders,  but  occasionally  through  oversight,  a  shipment 
of  this  kind  is  made,  but  I  find  that  when  the  wholesalers  at- 
tention is  called  to  the  matter,  shipment  of  this  character  imme- 
diately ceases.  I  would  like  to  have  you  go  on  record  regarding 
this  shipment,  and  let  us  dispose  of  this  complaint  before  we 
have  occasion  to  refer  it  to  the  arbitration  committee  of  the  Twin 
City  Implt.,  Vehicle  &  Hdwe.  Club  and  our  own  arbitration  com- 
mittee, who  hold  a  joint  meeting  in  Mpls.  April  4. 

I  assume  that  you  would  not  care  to  have  these  matters 
brought  up  at  this  meeting,  but  would  prefer  to  settle  it  direct 
with  this  office,  thereby  avoiding  any  publicity. 

The  wholesale  house,  on  March  13,  wrote,  showing  what  goods 
had  been  shipped,  and  stating  that  the  shipment  was  made  upon 
the  representation  of  their  salesman  that  the  consignee  was  engaging 
in  the  implement  business.  They  wrote  again  on  March  20  that  they 
had  investigated  and  were  satisfied  the  farmers'  cooperative  com- 
pany in  question  was  conducting  a  legitimate  business,  and  they 
went  on  to  say: 

We  are  also  informed  that  the  person  who  made  the  com- 
plaint has  made  similar  complaints  in  the  past  against  other 
firms  that  endeavored  to  obtain  a  foothold  at  *  *  *,  and 
that  ha  is  a  notorious  price  cutter  when  it  comes  to  driving  legiti- 
mate competition  out  of  town.    He  is  said  to  be  fixed  financially 


EESTBICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS. 


177 


A 


SO  that  he  can  afford  to  make  whatever  prices  are  necessary  to 
force  his  competitors  to  the  wall. 

Should  you  publish  in  your  official  organ,  any  correspondence 
on  this  subject,  we  should  be  pleased  to  have  you  include  the 
entire  correspondence,  together  with  this  letter. 

The  secretary  of  the  dealers'  association  wrote,  on  March  21,  as 
follows: 

Replying  to  your  letter  of  the  13th,  re  Farmers  Co-op  Merc. 
Co.  *  *  ♦  I  wish  to  take  exception  to  that  portion  of  your 
letter  wherein  you  say  "  This  shipment  was  made  by  us  on  the 
representation  of  our  salesman  that  these  people  are  engaging  in 
the  implement  business  and  judging  from  the  fairly  complete 
line  of  samples  which  they  have  ordered,  we  believe  that  we 
could  not  be  criticized  in  honoring  their  order." 

You  know  that  the  quantity  of  goods  shipped  *  *  *  does 
not  indicate  that  these  people  are  engaging  in  the  retail  imple- 
ment business,  and  it  is  preposterous  to  assume  that  any  such 
thing  is  likely  to  come  to  pass. 

The  name  of  the  company  should  be  sufficient  to  arouse  your 
suspicion  that  these  goods  were  ordered  specially  for  some 
farmer  forming  this  concern. 

It  seems  strange  that  large  wholesalers  such  as  your  company 
should  so  far  forget  the  ethics  of  the  implement  business  as  to 
fill  an  order  like  the  one  in  question,  and  then  excuse  the  matter 
as  you  do  in  that  portion  of  your  letter  quoted  above.  I  know 
and  you  know  that  in  this  present  day  no  man  can  engage  in  the 
retail  implement  business  legitimately  without  carrying  a  stock 
on  hand,  amounting  from  $2,000  up.  In  fact,  the  better  class 
of  dealers  carry  from  $4,000  to  $10,000  in  stock. 

Assuming  that  you  wish  to  be  fair  in  this  matter,  I  am  going 

to  request  that  you  make  an  investigation  of  these  parties  and 

unless  they  are  willing  to  place  an  order  with  you  for  one  or 

•     more  cars  of  goods,  embracing  a  complete  line,  that  you  refrain 

from  shipping  any  more  goods  to  them. 

A  joint  meeting  of  the  arbitration  committee  of  this  associa- 
tion   *     *     *    will  be  held  with  the  arbitration  committee  of 
the  Twin  City  Implement,  Vehicle  &  Hdwe.  Club  on  Tuesday, 
April  4,  and  unless  we  can  get  this  complaint  closed  before  that 
time,  I  shall  have  to  refer  the  matter  for  adjustment  to  this 
committee.     I  assume  that  you  would  not  care  to  have  your 
name  before  this  committee  and  hope  I  can  get  a  definite  prom- 
ise from  you  before  this  April  meeting  not  to  ship  any  more 
goods  to  the    *     *     *     people. 
The  case  was  brought  to  the  attention  of  the  joint  arbitration  com- 
mittee mentioned  in  the  correspondence,  but  nothing  further  seems 
to  have  been  done  about  it.    In  an  interview  with  an  agent  of  the 
Bureau  of  Corporations  at  about  this  time  the  chairman  of  the 
jobbers'  committee  on  arbitration  stated  that  he  had  no  knowledge 
of  any  case  where  the  dealers'  association  had  actually  notified  its 
members  that  any  jobber  or  manufacturer  was  unfair. 
68248**— 15 ^12 


■I 


178 


FAEM-MACHINEBY  TEADE  ASSOCIATIONS. 


I 


Another  Minneapolis  jobber,  however,  stated  that  he  gave  up  an 
agency  with  another  farmers'  cooperative  store  in  that  State  in 
1911  because  the  grievance  committee  of  the  Minnesota  Retail  Im- 
plement Dealers'  Association  complained  that  such  sales  were  ir- 
regular. 

The  sale  of  goods  to  cooperative  stores  had  already  been  discussed 
by  the  directors  of  the  Western  association  at  the  convention  in 
January,  1900,  when*  it  was  decided  that  the  association  could  not 
then  reach  such  cases,  and  the  subject  was  dismissed.  A  year  later 
the  report  of  the  secretary  of  the  Westera  association  disclosed  the 
reason  for  the  opposition  of  dealers  to  such  stores.  In  this  report 
he  said: 

As  I  understand  it,  the  prices  maintained  are  somewhat  lower 
than  the  regular  retail  prices;  then  each  purchaser  who  is  a 
subscriber  to  the  stock  of  the  cooperative  store  receives  a  re- 
bate, and  it  has  become  the  custom  of  these  parties  to  purchase 
goods  for  their  neighbors,  securing  the  rebate  for  themselves 
and  dividing  it  with  the  purchaser.    It  can  readily  be  seen  that 
this  makes  very  hard  competition  for  the  other  dealers  in  the 
same  towns.    1  have  had  considerable  correspondence  with  the 
dealers  in  that  county  and  finally  wrote  them  that  if  one  of 
their  members  saw  fit  to  be  present  at  this  meeting  I  knew  that 
this  board  would  accord  them  a  respectful  hearing. 
Activities  of  the  Iowa  Implement  Dealers'  Association  in  oppo- 
sition to  the  sale  of  farm  machmery  by  farmers'  cooperative  stores 
in  that  State  are  referred  to  elsewhere.    (See  pp.  154^158.) 

In  October,  1910,  the  secretary  of  the  Federation,  in  a  letter  to  the* 
president  of  the  Cost  Educational  Association  (who  soon  afterwards 
became  secretary  and  general  manager  of  the  National  Implement  & 
Vehicle  Association),  characterized  the  cooperative  movement  among 
farmers  as  dangerous.  The  letter  referred  to  read  in  part  as  fol- 
lows: 

A  new  danger  threatens  the  dealers  in  Kansas  and  Oklahoma. 
I  refer  to  the  Farmers'  Unions.    These  are  causing  trouble  be- 
cause some  manufacturers  and  jobbers  contend  that  they  must 
sell  to  them.    It  is  going  to  cause  trouble.    I  want  to  talk  to  you 
about  this  in  St.  Louis  if  I  can  have  your  attention  a  few  mm- 
utes.    It  is  a  matter  that  we  must  handle  quickly.    It  can  not 
be  given  any  publicity.     Could  not  take  it  up  m  Chicago  as 
there  was  too  much  else  to  talk  about. 
It  may  also  be  noted  that  the  Virginia  &  North  Carolina  Retail 
Implement,  Machinery  &  Vehicle  Dealers'  Association,  which  was 
organized  in  February,  1909,  and  became  affiliated  with  the  Na- 
tional Federation  in  1912,  was  engaged  in  opposing  the  sale  of  farm 
machinery  to  stores  operated  in  connection  with  Farmers'  Union 
cooperative  stores  at  several  points  in  North  Carolina.    Its  sec- 
retary, in  speaking  of  its  work  in  1912,  stated  that  through  its 


m 


EESTRICTION  OF  KETAIL  TEADE  TO  EETAIL  DEALEBS.     179 

efforts  several  large  concerns  had  been  induced  to  stop  furnishing 
supplies  to  irregular  dealers,  mostly  Farmers'  Union  cooperative 
concerns.  He  was  strongly  opposed  to  these  enterprises,  feeling  that 
if  they  could  get  a  supply  of  farm  implements  and  machines  they 
would  eventually  control  that  part  of  the  retail  business.  Notwith- 
standing the  fact  that  this  association  was  composed  of  only  about 
40  members  in  1912,  its  protest  to  several  manufacturers  is  said  to 
have  caused  the  latter  to  discontinue  shipments  to  several  farmers' 
cooperative  stores  in  North  Carolina.  After  its  protest  a  wagon- 
manufacturing  company  refused  to  furnish  a  second  consignment  of 
goods  to  a  farmers'  cooperative  supply  company  which  planned  to 
sell  to  members  at  cost  after  making  allowance  for  an  amount  neces- 
sary to  pay  6  per  cent  on  stock  after  actual  selling  expenses  were 
paid.  A  protest  to  a  western  plow  manufacturer  caused  the  latter 
to  advise  the  farmers'  cooperative  store  at  another  point  that  they 
could  furnish  no  more  goods  until  they  had  made  an  investigation, 
and  also  caused  an  eastern  manufacturer  of  farm  machinery  to  stop 

selling  to  this  store. 

Similarly,  protests  from  regular  dealers  resulted  in  cutting  off 
most  of  the  supplies  of  a  farmers'  exchange  at  a  point  in  eastern 
Tennessee. 

The  president  of  the  Virginia  and  North  Carolina  implement  deal- 
ers' association,  in  an  address  in  the  early  part  of  1913,  is  quoted  as 
saying : 

The  Farmers'  Union,  an  organization  established  for  the 
purpose  of  buying  and  selling  direct,  must  claim  a  portion  of 
our  attention,  for  if  this  combine  accomplishes  its  full  purpose, 
the  retail  implement  dealer  is  no  longer  of  service  to  his  coun- 
try except  to  carry  repairs  and  furnish  time  trade  to  those 
who  can  not  obtain  membership  in  the  union.  We  can  not  object 
to  a  manufacturer  selling  these  unions  provided  he  markets  his 
entire  output  in  this  manner,  but  must  assert  ourselves  against 
the  practice  of  selling  both  the  dealer  and  the  consumer. 

In  1913  the  Pennsylvania  and  New  Jersey  Retail  Implement 
Dealers'  Association  became  one  of  the  constituent  associations  of 
the  National  Federation.  This  association  had  been  formed  a  short 
time  before,  largely  through  the  efforts  of  a  trade  paper  which  made 
an  aggressive  campaign  against  the  sale  of  goods  by  manufacturers 
to  a  cooperative  enterprise  operated  in  Pennsylvania  by  the  Lancaster 
County  Farmers'  Association.  Almost  as  soon  as  the  association  of 
Pennsylvania  and  New  Jersey  dealers  joined  the  Federation  it  filed 
protest  with  the  secretary  of  the  latter  organization  against  the  sale 
of  goods  to  this  concern  in  Lancaster  County. 

The  Federation  secretary  wrote  the  secretary  and  general  man- 
ager of  the  National  Implement  &  Vehicle  Association,  advising  him 


r-/ 


180  FABM-MACmNEBY  TBADE  A8S0CUTI0N8. 

that  the  Pennsylvania  and  New  Jersey  dealers  had  a  grievance  in 
the  matter  of  manufacturers  seUing  to  cooperative  stores,  which  they 
wanted  to  have  considered  at  the  next  Federation  meeting.    He 
wrote  that  a  great  amount  of  pubUcity  had  been  given  this  matter 
through  certain  trade  papers,  and  he  understood  that  a  request  had 
been  made  of  the  president  of  the  National  Implement  &  Vehicle 
Association  to  appoint  a  special  committee  to  hear  the  grievance  of 
the  eastern  dealers,  and  that  a  similar  request  had  been  made  of  the 
Federation.    He  stated  in  his  letter  that  they  had  been  advised  that 
the  Federation  could  not  think  of  granting  their  requ^t  for  a  special 
committee,  but  that  a  hearing  would  be  granted.    The  matter,  he 
thought,  should  come  up  before  a  meeting  of  the  comniittee  on  dealers 
associations  of  the  manufacturers'  association  and  the  official  board 
of  the  Federation.    Apparently,  one  of  the  reasons  why  the  eastern 
dealers  had  requested  that  the  matter  be  referred  to  a  special  com- 
mittee was  the  fact  that  the  chairman  of  the  manufacturers   com- 
mittee on  dealers'  associations  was  one  of  the  manufacturers  com- 

^^The  siretary  of  the  National  Implement  &  Vehicle  Association 
in  his  reply  to  the  secretary  of  the  Federation  stated  that  he  had 
discussed  the  matter  with  the  chairman  of  the  executive  committee 
of  the  manufacturers'  association,  and  that  in  their  opinion  it  was  a 
matter  that  did  not  properly  concern  the  joint  conference  until  it 
had  been  reduced  to  a  point  where  some  principle  of  a  general  char- 
acter was  involved.  He  advised  that  the  Federation  appoint  a 
special  committee  to  meet  with  the  chairman  of  the  committee  on 
defers'  associations  of  the  manufacturers'  association  and  other 
manufacturers  concerned  in  the  eastern  trade  to  thi-esh  the  matter 
out  and  report.    He  went  on  to  say: 

The  conditions  in  the  eastern  territory,  as  you  »"*  P/obably 
well  aware  of,  are  quite  different  than  m  the  West,  and  I  do  not 
Jwnk  y^wiil  fin3  it  possible  to  apply  literally  the  definition 
ofTretail  dealer  to  that  eastern  country,  but  undoubtedly  some- 
thing can  te  done  to  bring  about  a  better  understanding  between 
both  dealers  and  manufacturers. 
The  Pennsylvania  and  New  Jersey  Retail  Implement  &  V.*.cle 
Dealers'  Association  was  represented  at  the  convention  of  the  Federa^ 
tion  at  its  convention  in  October,  1913,  but  the  published  records  of 
that  meeting  do  not  show  that  any  action  was  taken  on  the  complaint 
of  the  eastern  dealers,  nor  do  the  resolutions  adopted  contam  any 
reference  expressing  the  condemnation  of  farmers'  cooperative  en- 
terprises except  as  may  be  contained  in  the  following : 

OuesUonable  selling  «cAe»ne«.— Whereas,  in  the  course  of  re- 
tail tradnertain  conditions  have  developed  in  which  corpora- 
tionsVtois  or  individuals  have  sold  so-called  membership  cer- 


/" 


BESTRICTION  OP  RETAIL  TRADE  TO  RETAIL*  DEALERS.     181 

tificates,  which  entitle  the  holders  to  special  prices  more  favor- 
able than  those  offered  to  nonholders  of  certificates,  therefore, 

be  it 

Resolved,  That  such  fly-by-night  schemes  should  not  be  prac- 
ticed; that  concerns  adopting  this  plan  are  not  entitled  to  the 
benefits  derived  from  membership  in  the  retail  associations,  and 
that  said  concerns  place  themselves  in  a  position  to  be  looked 
upon  unfavorably  as  customers  for  manufacturers  and  jobbers. 

The  implement  trade  paper  which  aided  in  the  formation  of  the 
Pennsylvania  and  New  Jersey  association  (see  p.  179)  was  also  a 
factor  in  causing  the  association  of  Virginia-North  Carolina  dealers 
to  be  organized.  This  paper,  which  was  adopted  as  the  official  organ 
of  the  latter  association,  in  an  editorial  discussing  the  competition  of 
the  cooperative  stores,  said : 

It  makes  no  difference  at  all  if  these  farmer  stores  carry  a 
stock,  sell  at  retail  prices  and  perform  outwardly  the  function 
of  a  regular  dealer,  they  are  organized  to  break  down  the  regu- 
lar merchant,  and  we  are  going  to  fight  any  house  who  will 
supply  goods  to  them  and  attempt  to  supply  goods  at  the  same 
time  to  the  regular  merchant. 
In  explaining  the  attitude  of  the  organized  dealers  toward  the 
sale  of  implements  to  cooperative  stores  to  an  agent  of  the  Bureau 
of  Corporations  in  1912,  the  secretary  of  the  Federation  asserted 
that  that  organization  had  never  considered  the  general  topic  of 
cooperative  stores.    He  stated  there  is  no  reason  why  implements  and 
vehicles  should  not  be  included  in  the  stock  of  successful  farmers' 
stores;  that  whether  a  manufacturer  is  justified  in  making  a  suc- 
cessful farmers'  store  his  retail  agent  depends  upon  the  selling  policy 
of  the  company.    He  asserted  that  if  the  farmers'  company  sold  at 
cost  it  would  put  all  dealers  out  of  business,  and  that  if  it  expected  to 
pay  dividends  to  stockholders  allowance  must  be  made  for  expenses 
and  profits.    He  stated  that  the  fact  that  a  farmers'  cooperative  asso- 
ciation holds  stock  in  an  established  corporation  doing  a  regular 
implement  business  would  not  necessarily  make  that  corporation  an 

irregular  dealer.  . 

During  the  summer  of  1912  agents  of  the  Bureau  interviewed  a 
number  of  managers  of  farmers'  cooperative  enterprises  in  several 
States.  It  was  found  that  many  of  the  so-callal  cooperative  stores 
were  merely  stock  companies  not  really  cooperative.  It  was  found 
that  cooperative  stores  were  not  numerous  and  that  those  handling 
implements  were  still  fewer  in  number.  Of  over  800  farmers'  elevator 
companies  in  the  State  of  Iowa,  probably  less  than  20  handled  imple- 
ments. Several  which  had  formerly  handled  implements  had  given 
up  the  attempt.  One  reason  assigned  for  this  chaiige  was  the  difficulty 
of  securing  standard  lines  of  goods  due  to  the  attitude  of  the  Iowa 
Implement  Dealers'  Association.    Another  reason  given  was  that  the 


182 


FARM-MACHINERY  TRADE  ASSOCUTIONS. 


manufacturers  took  away  the  agency  because  the  retail  prices  of  the 
cooperative  store  were  not  high  enough.  A  third  reason  assigned 
was  lack  of  capital,  which  made  it  impracticable  for  the  cooperative 
stores  to  sell  implements  on  time.  Nearly  all  the  managers  inter- 
viewed agreed  that  the  profit  in  implements  was  less  than  in  other 
lines  handled,  and  they  did  not  believe  that  it  would  pay  to  handle 
implements  as  a  separate  branch  of  their  business,  as  the  volume  of 
their  implement  trade  was  small. 

Opinions  of  the  trade  as  to  protective  activities  of  associa- 
tions.— In  the  course  of  the  Bureau's  investigations  members  of  vari- 
ous associations,  including  the  Western,  Iowa,  Illinois,  North  Dakota, 
Tri-State,  and  other  associations,  expressed  the  opinion  that  direct 
sales  by  manufacturers  and  jobbers  had  been  curtailed  through  the 
efforts  of  the  dealers'  associations. 

In  Minnesota  one  dealer  belonging  to  the  Minnesota  Ketail  Imple- 
ment Dealers'  Association  stated  that  the  members  of  that  association 
do  all  they  can  to  secure  a  list  of  manufacturers  who  do  direct  selling 
and  that  "  the  boys  "  come  away  from  the  meetings  in  such  a  frame 
of  mind  that  they  will  not  patronize  such  wholesalers.  Other  mem- 
bers thought  that  the  Minnesota  association  had  benefited  its  members 
by  breaking  up  direct  selling.  One  stated  that  the  association  through 
its  grievance  committee  would  "boycott"  a  wholesaler  for  selling 
direct  to  farmers  in  a  territory  where  the  wholesaler  had  a  dealer 
agent.  Another  member  stated  that  if  the  wholesaler  refused  to  stop 
direct  selling  the  case  was  reported  to  the  convention  of  dealers  who 
were  then  expected  to  quit  buying  of  him.  Another  member  said 
that  the  association  knows  that  it  dare  not  distribute  lists  of  direct 
sellers  among  its  members,  but  these  names  can  be  well  scattered 
among  the  dealers  by  means  of  the  traveling  salesmen  of  loyal  houses. 

The  representatives  of  several  of  the  smaller  wholesale  houses  at 
Minneapolis  stated  that  the  Minnesota  association  had  been  more 
aggressive  prior  to  1910  than  subsequently.  One  had  been  threatened 
some  time  previously  with  a  boycott  which  had  not  been  carried 
out.  Another  had  been  told  by  the  dealers  that  if  he  did  not  pay  a 
commission  requested  they  "would  fix  him."  Another  representa- 
tive of  a  wholesale  house  who  had  paid  a  commission  on  a  direct  sale 
at  the  request  of  the  dealers'  association,  stated  that  he  supposed 
he  would  have  been  blacklisted  if  he  had  not  paid  it,  as  he  believed 
it  to  be  the  policy  of  the  association  to  boycott  wholesalers  who  sold 
directly.  Another  manufacturer  stated  that  the  Minnesota  dealers' 
association  was  strong,  but  would  not  boycott  anyone  for  that  reason, 
and  in  this  connection  he  cited  an  instance  where  he  had  made  a 
direct  sale  which  was  reported  to  the  association,  but  nothing  was 


RESTRICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS. 


183 


done.  Furthermore,  no  evidence  was  found  to  indicate  that  any 
manufacturer  or  jobber  had  ever  been  actually  put  under  the  ban  of 
this  association. 

Protective  activities  not  confined  to  implement  trade. — ^The 
protective  efforts  of  the  implement  dealers'  associations  have  not  been 
confined  to  the  implement  trade.  In  alluding  to  this  matter  in 
December,  1909,  the  secretary  of  the  Western  association  in  a  letter 
to  a  Kansas  dealer  wrote,  in  part,  as  follows : 

You  are  mistaken  when  you  say  that  the  interest  of  our  as- 
sociation is  devoted  only  to  the  implement  business.  This  is 
far  from  being  the  case.  We  feel  that  we  have  accomplished 
more  real  good  with  the  hardware  and  supply  houses  than  with 
any  other  branch.  A  few  years  ago  nearly  all  of  the  hardware 
and  supply  houses  were  selling  goods  to  mail  order  houses,  but 
at  present  not  one  of  them  is  doing  it  to  my  knowledge.  We 
are  taking  up  complaints  on  account  of  violation  of  trade  rules 
by  the  hardware  houses  just  the  same  as  the  implement  houses. 
I  am  glad  you  have  given  me  an  opportimity  of  explaining  this. 

Still  later,  in  writing  to  another  firm  of  dealers,  in  May,  1911,  he 
said: 

I  have  a  number  of  complaints  on  hand  now  where  shipments 
have  been  made  to  parties  who  are  not  regular  hardware  dealers, 
and  they  are  being  pushed  the  same  as  though  they  were  for 
implement  dealers. 

The  fact  that  you  have  not  had  any  trouble  in  your  vicinity 
is  a  matter  for  congratulation,  and  I  hope  that  you  will  give 
the  association's  restraining  influence  credit.  If  you  have 
any  particular  grievances,  kindly  notify  me. 

In  the  latter  part  of  1912  it  was  asserted  in  the  Bulletin  that  over 
80  per  cent  of  the  members  of  the  Western  association  handled  hard- 
ware and  that  a  large  percentage  were  exclusively  hardware  dealers.* 

In  March,  1913,  members  of  the  Kansas  City  Retail  Hardware 
Dealers'  Club  joined  the  Western  association  to  secure  its  protective 
influence.  This  marked  the  consummation  of  negotions  that  had 
been  pending  for  two  years. 

Shortly  after  the  Kansas  City  hardware  dealers  joined  the  West- 
ern association  an  item  was  published  in  the  Implement  Dealers' 
Bulletin  stating  that  two  instances  had  already  taken  place  which 
showed  that  their  confidence  in  thinking  that  they  could  get  some 
relief  from  unfair  conditions  by  joining  the  Western  association  had 
not  been  misplaced.  Subsequently,  the  secretary  of  the  Kansas  City 
Eetail  Hardware  Dealers'  Club  wrote  the  secretary  of  the  Westeru 


*In  1913  several  local  clubs  of  hardware  dealers,  previously  organized  by  the  Minnesota 
Retail  Hardware  Association,  were  combined  with  local  clubs  of  Implement  dealers  organ- 
ized by  the  Minnesota  Retail  Implement  Dealers*  Association.  Local  clubs  formed  in  that 
State  during  1914  were  composed  of  both  hardware  and  implement  dealers. 


184 


FABM-MACHINERY  TRADE  ASSOCIATIONS. 


association  in  regard  to  the  assistance  of  the  latter  association,  as 

follows : 

I  was  instructed  at  last  night's  meeting  of  our  club  to  convey 
to  you  the  thanks  of  this  body  for  the  help  of  the  officers  of  your 
association  in  bringing  about  a  very  important  change  in  condi- 
tions here  but  think  all  concerned  will  be  benefited  and  we  are 
pleased  to  think  we  joined  the  Western  association  and  have  the 
benefit  of  its  protective  influence. 

In  connection  with  this  matter  the  Bulletin  for  January,  1914, 
contained  an  article  stating  that  one  of  the  hardware  companies  at 
Kansas  City  had  discontinued  its  retail  department,  a  very  lucrative 
branch  of  its  business.  This  had  been  done,  it  was  stated,  in  order 
to  meet  the  wishes  of  the  retail  hardware  dealers  of  Kansas  City  and 
of  Independence,  Mo.  The  article  stated  that  the  retail  dealers  "  are 
much  pleased  with  the  new  policy  of  this  old  and  reliable  concern,  as 
the  hardware  dealers  in  the  Kansas  City  territory  will  all  be,  and 
have  pledged  them  a  larger  share  of  their  business  than  they  have 
heretofore  given  them." 

Furthermore,  at  the  convention  of  the  Western  Retail  Implement 
&  Vehicle  Dealers'  Association  in  1914,  the  name  of  that  association 
was  changed  to  the  Western  Retail  Implement,  Vehicle  &  Hardware 
Association  in  order  to  give  recognition  to  members  handling  hard- 
ware exclusively.  At  this  convention  a  number  of  automobile  dealers 
were  also  admitted  to  membership. 

In  the  early  part  of  1913  the  secretary  of  the  Federation  seems  to 
have  felt  that  the  associations  were  in  danger  of  losing  sight  of  the 
fact  that  their  primary  object  was  the  protection  of  the  regular 
dealer.  In  this  connection,  he  issued  a  general  letter  to  the  secretaries 
of  the  constituent  associations  in  April,  1913,  in  which  he  said,  in 
part: 

We  are  trying  to  raise  the  standard  of  the  implement  dealer 

and  secure  for  him  the  protection  to  which  he  is  entitled,  but 

you  know  we  can  not  do  these  things  through  our  freight  audit 

bureaus,  etc.    [See  p.  73,  note.]    They  are  simply  means  to  the 

desired  end. 

A  copy^of  this  letter  was  sent  to  the  secretary  and  general  manager 

of  the  National  Implement  &  Vehicle  Association  with  a  letter  which 

read,  in  part,  as  follows : 

I  supposed  that  a  copy  of  general  letter  No.  77  had  been  sent 
to  you  but  I  find  it  has  not.  I  enclose  one  herewith.  I  simply 
send  this  to  you  to  let  you  know  what  my  fears  are  in  regard  to 
the  work  of  some  of  our  associations.  They  have  been  laying  so 
much  stress  upon  the  insurance  plans  and  the  freight  audit 
bureau  that  I  feared  they  might  neglect  some  other  more  im- 
portant work.    I  have  received  four  replies  and  m  all  of  these 


il 


BESTRICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS. 


185 


% 


the  secretaries  express  their  thanks  for  the  timely  warning  that 
I  have  given  them.  Three  of  them  said  they  were  going  off  on 
the  very  tangent  I  feared  they  would.  If  we  are  going  to  make 
a  success  of  this  association  work  we  must  not  get  very  far  away 
from  the  main  principles  for  which  we  are  organized. 

Section  4.  Methods  used  with  manufacturers  nnwilling  to  settle  com- 
plaints amicably. 

In  the  earlier  years  of  association  activity  among  the  dealers,  the 
members  of  various  associations  pledged  themselves  not  to  patronize 
any  manafacturer  or  jobber  who  did  not  confine  his  trade  to  the 
^regular  retailer.  The  establishment  of  harmonious  relations  with 
manufacturers'  and  jobbers'  organizations  provided  a  method  by 
which  most  complaints  by  dealers  against  individual  concerns  could 
be  amicably  adjusted,  but  at  times  cases  arose  in  which  the  manu- 
facturer or  jobber  complained  of  was  not  willing  to  conform  to  the 
requests  of  the  dealers.  From  the  standpoint  of  the  dealers  the  most 
desirable  way  of  treating  such  cases  was  for  the  names  of  such  offend- 
ing manufacturers  and  jobbers  to  be  furnished  to  the  membership  of 
the  dealers'  organizations. 

During  the  nineties  the  discussion  of  complaints  at  executive  ses- 
sions of  the  members  provided  one  way  in  which  this  information 
was  disseminated,  but  as  some  uncertainty  appears  to  have  existed 
as  to  the  legality  of  this  practice,  the  secretary  of  the  Western  asso- 
ciation, in  1900,  consulted  the  attorney  of  the  Missouri  &  Kansas 
Lumbermen's  Association  as  to  the  liability  of  the  Western  asso- 
ciation in  reporting  to  m^bers  the  names  of  manufacturers  and 
jobbers  who  had  failed  to  afford  what  was  considered  proper  protec- 
tion by  the  dealers.  Arrangements  were  made  whereby  the  attorney 
undertook  to  examine  the  laws  of  the  States  where  the  Western 
association  was  represented,  and  also  to  review  the  constitution 
and  by-laws  of  the  association  and  the  resolutions  adopted  at  conven- 
tions. The  minutes  of  the  association  record  that  the  attorney  ap- 
peared in  person  before  the  board  of  directors  of  the  Western  asso- 
ciation at  its  convention  in  January,  1901,  and  advised  as  follows: 

To  bring  violations  of  trade  rules  to  the  attention  of  our 
members  by  simply  stating  in  our  Bulletin  or  by  private  cir- 
cular that  "  the  following  wholesalers  sell  at  wholesale  and  re- 
tail "  or  "  Mr.  Blank  says  he  would  not  buy  from because 

they  sell  to  the  user  or  consumer." 

The  minutes  of  this  meeting,  however,  do  not  show  that  any  action 
was  taken  on  this  advice. 

Information  Bureau. — ^The  matter  of  constituent  associations  fur.- 
nishing  information  to  members  was  again  taken  up  at  the  annual 
meeting  of  the  Federation  in  October,  1903,  and  also  in  November, 


n 


186 


PAEM-MACHIKEBY  TBADE  ASSOCIATIONS. 


1904.    At  the  latter  meeting  the  secretary  of  the  Federation  reported 
as  follows: 

There  are,  as  you  are  aware,  two  classes  of  wholesalers;  one 
class  protects  the  dealer  because  they  want  to,  and  the  other  be- 
cause they  feel  compelled  to,  and  there  is  a  very  evident  feeling 
on  the  part  of  the  latter  that,  owing  to  recent  decisions  of  the 
courts,  we  are  not  in  a  position  to  report  violations  of  well 
established  trade  ethics  without  laying  ourselves  liable  under 
the  anti-trust  laws,  and  take  the  position  that  such  action  on 
our  part  would  be  construed  as  an  act  in  restraint  of  trade. 
Developments  during  the  year  have  demonstrated  plainly  the 
necessity  of  associations  adopting  such  rules  as  will  enable  them 
to  safely  report  to  members  the  names  of  such  wholesalers  as 
do  not  show  a  willingness  to  protect  the  trade. 

The  druggists'  association  is  involved  in  litigation  at  the 
present  time,  and  the  lumbermen  have  had  considerable  trouble. 
The  latter  finally,  upon  advice  of  their  attorneys,  abrogated 
the  old  rules  and  formed  a  sort  of  information  bureau.     The 
members  become  subscribers  for  the  information  the  same  as 
a  wholesaler  does  to  a  commercial  agency  when  he  subscribes 
for  information  concerning  the  standing  of  dealers.     If  the 
wholesaler  shows  a  disposition  to  ignore  the  dealers'  rights,  the 
information  can  be  given  to  members,  and  there  being  nothing 
in  the  rules  which  binds  members  to  withhold  trade  from  such 
concerns  it  can  not  be  construed  that  the  action  is  in  restraint  of 
trade,  and  the  anti-trust  laws  will  not  apply.    If  at  this  meet- 
ing a  set  of  rules  can  be  outlined  so  that  the  coming  conventions 
can  ratify  them  it  will  be  a  very  important  work  accomplished. 
The  same  by-laws  might  not  be  suitable  for  all  constituent  asso- 
ciations, as  different  situations  may  prevail  in  different  localities. 
If   we   expect   this   Federation   tq   accomplish   the   greatest 
amount  of  good  for  the  retail  dealer  we  must  organize  upon  a 
firm  basis,  not  only  that,  but  we  must  see  to  it  that  our  con- 
stituent associations  are  thoroughly  organized.    There  must  be 
system  about  the  work.    This  is  one  of  the  important  matters  to 
come  before  this  meeting,  and  I  trust  that  sufficient  time  will  be 
devoted  to  it  to  complete  the  work. 
In  connection  with  the  secretary's  declaration,  shown  above,  to 
the  effect  that  the  associations  should  adopt  rules  to  enable  them 
safely  to  report  to  members  the  names  of  wholesalers  who  did  not 
show  a  willingness  to  protect  the  trade,  the  preparation  of  a  uniform 
constitution  and  by-laws  for  all  of  the  constituent  associations  was 
made  a  special  order  of  business  at  this  convention.    One  of  the  dele- 
gates read  the  constitution  and  by-laws  adopted  a  short  time  before 
by  the  Southwestern  Lumbermen's  Association,  which,  it  was  an- 
nounced, had  been  adopted  by  all  of  the  lumbermen's  associations 
in  their  Federation.    After  a  thorough  discussion,  articles  of  associa- 
tion were  adopted  as  a  form  to  be  recommended  to  the  various  associa- 
tions belonging  to  the  National  Federation  of  Impjiement  &  Vehicle 
Dealers'  Associations.    These  articles  stated  the  object  of  the  asso- 


BESTRICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS. 


187 


'. 


ciation  was  "to  secure  and  disseminate  to  its  members  any  and  all 
legal  and  proper  information  which  may  be  of  interest  or  value  to 
any  member  or  members  thereof  in  his  or  their  business  as  retail 
implement,  vehicle,  or  hardware  dealers."    (See  Exhibit  24,  p.  310.) 

The  articles  recommended  provided  that  no  rules,  regulations,  or 
by-laws  should  be  adopted  in  any  manner  stifling  competition,  lim- 
iting production,  restraining  trade,  regulating  prices,  or  pooling 
profits ;  that  no  coercive  measures  or  discriminatory  practices  should 
be  used  toward  any  retailer  to  compel  him  to  join  the  association  or 
to  refrain  from  buying  from  any  particular  manufacturer  or  job- 
ber; and  that  no  promises  or  agreements  of  any  kind  should  be 
.requisite  to  membership  in  the  association,  nor  should  any  penal- 
ties be  imposed  upon  members  for  any  cause  whatsoever.  One  of 
the  articles  provided,  however,  that  any  member,  having  a  knowledge 
of  a  sale  by  a  manufacturer  or  wholesale  dealer  to  other  than  a  regu- 
lar dealer,  might  notify  the  secretary  of  the  association,  giving  full 
information,  and  that  upon  the  receipt  of  this  notice  it  should  be 
immediately  verified  by  the  secretary.  Each  member  was  also  ex- 
pected to  furnish  the  secretary  annually  or  oftener  a  list  of  the 
manufacturers  and  wholesalers  from  whom  he  bought. 

The  resolutions  committee  of  the  Federation,  in  referring  to  the 
uniform  articles  of  association,  made  the  following  report : 

As  is  well  known  to  most  of  the  official  members  of  our  con- 
stituent associations,  their  work,  as  well  as  that  of  the  Federation 
board,  is  frequently  hampered  because  of  diversity  and  lack  of 
'  harmony  in  their  different  constitutions  and  by-laws.  For  this 
reason,  and  that  the  organization  of  our  associations  may  be 
rendered  more  compact  and  their  work  more  effective,  we,  your 
committee,  earnestly  recommend  the  articles  of  association  for 
constituent  associations,  as  approved  at  this  meeting  of  the 
Federation;  and  urge  the  official  boards  of  our  several  associa- 
tions and  their  delegates  here  present  to  endeavor  by  all  honor- 
able means  to  secure  the  ratification  and  adoption  of  the  same 
at  their  coming  annual  conventions.  We  would  also  recommend 
that  a  committee  be  appointed  to  revise  our  articles  of  federa- 
tion, in  so  far  as  may  be  necessary  to  conform  to  the  new  articles 
of  association,  thereby  unifying,  strengthening  and  safeguard- 
ing, legallj[  and  otherwise,  the  entire  plan  of  organization. 
Such  committee  to  have  the  new  plan  passed  upon  by  good  legal 
talent  and  be  prepared  to  report  at  next  meetin^^  of  the  Federa- 
tion, or  its  board  of  directors,  which  your  committee  would  sug- 
gest be  held  at  Kansas  City  in  January  if  enough  members 
should  be  present  to  constitute  a  quorum. 

By  August,  1905,  the  new  constitution  and  by-laws  had  been 
adopted  by  practically  all  of  the  constituent  associations.  New 
articles  of  association  for  the  Federation  had  been  prepared,  and  it 
was  announced  that  the  Information  Bureau,  referred  to  in  the  re- 


^ 


I 


188 


FAKM-MACHINERY   TRADE  ASSOCIATIONS. 


port  of  the  secretary  of  the  Federation  in  November,  1904  (see  p.  186) , 
had  been  incorporated  under  the  laws  of  Illinois.  It  was  stated  that 
this  bureau,  made  up  of  the  official  board  of  the  Federation,  would 
enable  the  executive  committee  at  any  time  legally  and  safely  to  com- 
municate to  the  officers  and  members  of  the  constituent  associations 
all  the  facts  pertaining  to  cases  in  which  satisfactory  adjustment 
could  not  be  otherwise  secured.  In  this  connection,  the  following 
statement  was  made: 

Association  members  in  good  standing  will  be  thereby  fully 
informed  as  to  who  are  "  regular  "  and  who  are  not  and  such  a 
pressure  must  inevitably  result  as  will  carry  any  reasonable 
contention.  While  this  proceeding  is  sometimes  absolutely  neces- 
sary in  order  to  secure  adequate  protection  for  our  members,  it 
is  at  the  same  time  an  act  of  simple  justice  toward  those  jobbers 
and  the  manufacturers  who  are  disposed  to  deal  fairly  with  the 
trade. 

It  was  reported  in  January,  1906,  that  the  organization  of  the  In- 
formation Bureau  had  been  completed,  so  that  the  Federation  was 
properly  fitted  to  afford  the  trade  better  protection  than  at  any  time 
theretofore  by  furnishing  members  with  the  names  of  manufacturers 
and  jobbers  making  irregular  sales. 

The  secretary  subsequently  cautioned  members  not  to  do  anything 
that  could  be  construed  in  the  light  of  restraining  trade  or  prevent- 
ing parties  who  were  engaged  in  business  from  buying  goods.    He 
reported  that  the  attorney  who  had  drawn  up  the  articles  for  the 
Information  Bureau- 
stated  positively  that  we  must  not  make  any  demands  for  commis- 
sions, as  that  might  be  construed  as  blackmail.     Neither  can  we 
safely  demand  discontinuance  of  the  shipments,  as  that  would  be 
construed  as  a  direct  violation  of  the  antitrust  laws.    He  stated 
that  the  proper  course  to  pursue  is  to  assume  that  the  informa- 
tion you  give  is  desired  by  the  wholesalers,  thev  having  declared 
that  it  is  their  policy  to  protect  the  dealer.     Soon  after  this  in- 
terview I  wrote  all  secretaries  of  the  constituent  associations 
giving  them  the  benefit  of  the  attorney's  service. 

In  July,  1907,  announcement  w«s  made  that  blanks  had  been  sent 
to  all  members  of  the  Western  association  which,  when  signed  and 
returned  to  the  secretary's  office,  would  entitle  the  dealer  to  the  in- 
formation which  the  Information  Bureau  had  to  give  out  from  time 
to  time.  It  was  stated  that  no  member  would  receive  this  informa- 
tion unless  his  request  therefor  was  on  file  at  the  secretary's  office. 

At  the  Federation  meeting  in  October,  1907,  the  president  ex- 
pressed the  opinion  that  the  new  Information  Bureau  should  be  one 
of  the  inducements  for  adding  membership  to  the  associations  and 
be  a  great  factor  in  the  adjustment  of  complaints.  To  secure  the 
maximum  benefit  of  the  Information  Bureau  and  the  Federation, 


RESTRICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS. 


189 


/" 


he  urged  dealers  to  favor  their  friends  and  not  place  their  trade 
with  concerns  recognized  to  be  in  opposition  to  the  rights  of  the 
retail  dealers.  He  recommended  that  the  subject  of  loyalty  in  all 
its  phases  be  given  special  attention  at  the  conventions  of  the  con- 
stituent associations.  At  the  convention  of  the  Federation  in  Octo- 
ber, 1908,  some  doubts  were  expressed  in  regard  to  the  legality  of 
installing  the  Information  Bureau,  but  a  resolution  was  adopted  com- 
mending its  work.  Officials  of  the  Federation  claim  that  this  was 
done  only  for  the  moral  effect  it  would  have,  and  that  the  bureau 
was  never  put  in  operation.  In  October,  1909,  it  was  announced  that 
adverse  decisions  by  the  courts  had  made  it  inexpedient  to  put  the 
bureau  in  operation.  It  should  be  noted  that  this  action  was  taken 
immediately  after  the  decision  in  the  suit  of  the  Farmers'  Elevator 
Co.,  of  Gowrie,  against  the  Iowa  Implement  Dealers'  Association. 
(See  p.  157.)  Although  it  is  claimed  that  the  Information  Bureau 
has  never  been  active,  yet  the  charter  was  retained. 

Information  supplied  by  association  secretaries  on  request  of 
INDIVIDUAL  MEMBERS. — While  the  suits  against  the  Iowa  implement 
dealers  and  the  Mississippi  lumbermen  were  pending  in  the  courts 
the  dissemination  of  information  regarding  the  trade  policy  of  in- 
dividual manufacturers,  at  least  so  far  as  the  Western  association 
and  the  Federation  were  concerned,  seems  to  have  been  confined 
largely  to  correspondence  by  the  secretary  with  individual  members 
who  desired  such  information.  Correspondence  of  this  sort  took 
place  in  June,  1909,  between  the  secretary  of  the  Western  associa- 
tion and  one  of  the  members  who  had  forwarded  to  the  secretary 
correspondence  with  a  manufacturer  who  had  apparently  refused 
to  pay  a  commission  on  an  irregular  sale.  The  secretary  in  replying 
expressed  his  regret  that  he  could  not  do  anything  in  the  case  imless 
the  member  was  handling  the  manufacturers'  goods  in  the  regular 
way,  as  the  manufacturers  took  the  position  that  they  were  privi- 
leged to  sell  to  anybody,  but  insisted  that  commissions  were  paid 
upon  direct  sales  wherever  they  had  good  dealers  carrying  their 
goods  in  stock.  The  secretary  stated  that  notice  had  been  given 
members  at  several  conventions  and  through  correspondence  in  re- 
gard to  the  policy  of  this  company.  In  May,  1909,  the  secretary 
of  the  Federation  wrote  one  of  the  members  of  the  Western  asso- 
ciation that  the  Michigan  implement  dealers'  association  had 
"taken  the  bull  by  the  horns"  and  were  sending  out  a  report  in 
regard  to  the  trade  policy  of  a  specified  buggy  company.  The  sec- 
retary of  the  Federation  expressed  the  opinion  that  the  Michigan 
association  had  thereby  laid  themselves  liable  to  prosecution,  but 
he  thought  the  probabilities  were  that  they  would  not  have  any 
trouble  because  publicity  would  injure  the  buggy  company.    The 


\MKr^" 


iimi 


; 


100 


FABM-MAGHINEBY  TRADE  ASSOCIATIONS. 


secretary  of  the  Federation  was  also  secretary  of  the  Western  asso- 
ciation, and  in  this  letter  he  went  on  to  advise  the  member  to  whom 
he  was  writing  that  complaints  had  been  filed  against  a  concern 
whose  cultivators  the  secretary  thought  the  member  was  handling, 
and  in  this  connection  he  asked  for  any  information  the  member 
might  have  on  this  point.    He  concluded  the  letter  as  follows: 

I  do  not  write  this  to  discourage  you  from  handling  their 
goods,  but  simply  as  a  matter  of  news. 

In  April,  1910,  the  Bulletin  called  the  attention  of  the  organized 
dealers  to  the  fact  that  in  the  office  of  the  secretary  of  the  National 
Federation  there  was  on  file  a  great  amount  of  information  con- 
cerning the  policy  of  manufacturers  and  jobbers  which  it  had  taken 
years  to  collect.  It  was  stated  that  this  information  was  for  the 
benefit  of  members  of  affiliated  associations  and  that  prompt  atten- 
tion would  be  given  to  inquiries  from  members  in  regard  to  the 
manufacturers  and  jobbers  from  whom  they  were  buying  or  from 
whom  they  contemplated  buying.  Another  item,  headed  "  Informa- 
tion," informed  members  of  the  implement  and  hardware  associa- 
tions in  the  National  Federation  that,  if  they  had  any  business  with 
a  specified  manufacturing  company,  whose  name  was  given,  they 
could  secure  some  valuable  information  regarding  that  company  by 
writing  to  the  secretary  of  their  respective  associations. 

Shortly  after  the  decision  in  the  Mississippi  Lumbermen's  case 
the  secretary  of  the  Western  association  advised  members  in  a  circu- 
lar letter  that  the  antitrust  laws  prevented  the  publication,  either 
by  direct  or  implied  statement,  of  the  names  of  those  manufacturers 
and  jobbers  who  did  not  fully  protect  the  dealer.  He  amplified 
this  by  stating  that  such  a  list  of  such  names  could  not  legally  be 
furnished  the  members,  nor  published  in  the  Bulletin,  nor  could 
reference  be  made  to  the  fact  that  the  methods  of  manufacturers  or 
jobbers  were  inimical  to  the  interests  of  the  retail  dealer.  He 
stated  that  the  instructions  of  the  board  of  directors  were  being 
closely  followed,  and  it  was  not  proposed  to  take  any  steps  in  the 
association  work  that  was  not  clearly  within  the  pale  of  the  law. 
He  continued  as  follows: 

We  are,  however,  clearly  justified  in  furnishing  you  at  your 
request  with  such  information,  as  we  may  have  at  hand  con- 
cerning specific  cases.  For  instance,  you  are  selling  a  certain 
scale,  hay  press,  gasoline  engine,  line  of  plow  goods,  or  vehicles, 
or  are  dealing  with  a  certain  hardware  jobber  or  supply  house 
or  contemplate  taking  on  certain  new  lines  and  want  to  be 
assured  that  the  jobbers  or  manufacturers  are  loyal  to  dealers; 
you  can  make  request  for  such  information  as  the  association 
nas  been  able  to  accumulate,  and  a  copy  of  the  records  will  be 
sent  to  you,  and  under  our  rules  you  are  privileged  to  use  your 
own  discretion  concerning  your  business  relations  with  them. 


RESTKICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS. 


191 


/^ 


The  discretion  which  the  members  receiving  this  information  were 
expected  to  exercise  seems  to  have  been  indicated  in  an  editorial  pub- 
lished in  the  Implement  Dealers'  Bulletin  in  October,  1910.  This 
editorial  read  as  follows: 

Too  many  implements  and  vehicles  are  being  sold  by  manu- 
facturers and  jobbers  at  retail.  To  be  sure,  many  claim  to 
maintain  a  good  retail  price  and  are  willing  to  pay  the  margin 
above  wholesale  price  to  some  dealer  who  will  take  up  their 
line,  but  if  none  such  can  be  found  they  retain  it  and  comfort 
themselves  with  the  thought  that  they  have  done  nothing  wrong, 
as  they  charged  the  buyer  a  margin  above  wholesale  price. 
They  seem  unwilling  to  stick  to  their  own  calling,  the  whole- 
sale business ;  and  the  only  way  this  practice  can  ever  be  stopped 
"*"  is  by  dealers  favoring  with  their  patronage  the  wholesalers  who 
will  afford  them  full  and  complete  protection. 

Organized  dealers  can  get  the  information  needed  to  enable 
them  to  do  this  by  simply  writing  to  their  secretaries;  if  they 
have  not  the  information  at  hand  they  can  get  it. 

Dealers  themselves  must  take  up  this  work;  the  officials  can 
not  do  it  all.  What  they  need  is  stronger  backing.  The  in- 
fluence of  ten  thousand  dealers  is  greater  than  that  of  five 
thousand. 

Even  before  this  time  the  secretary  of  the  Western  association  had 
written  a  letter  to  one  of  the  trade  papers,  from  which  it  appears 
that  although  no  formal  pledge  was  exacted  of  members  to  discon- 
tinue purchases  from  direct-selling  concerns,  yet  a  certain  pressure 
was  brought  to  bear  upon  them  by  the  association  to  induce  them 
to  do  so.  In  this  letter,  written  August  28,  1909,  he  mentioned  the 
case  of  a  plow  company,  many  of  whose  dealer- agents  belonging  to 
the  association  had  canceled  their  contracts  with  the  company  after 
the  association  had  held  its  convention,  the  matter  having  been  dis- 
cussed in  board  meetings  at  which  these  dealers  were  rather  taken 
to  task. 

Meantime  an  article  was  published  in  the  Bulletin  in  August,  1910, 
explaining  the  manner  in  which  the  records  of  that  office  regarding 
the  trade  policy  of  wholesalers  was  kept,  and  urging  members  to 
make  use  of  this  information.    This  article  read  as  follows : 

In  order  that  our  members  may  form  some  idea  of  the  manner 
in  which  the  records  of  this  office  so  far  as  they  pertain  to  policy 
of  jobbers  and  manufacturers  are  kept,  we  give  out  a  few  quo- 
tations : 

"  Establish  a  few  agencies  with  dealers,  but  sell  most  of  their 
goods  direct,  with  good  differential  between  wholesale  and  retail 
price." 

"Sell  to  jobbers,  dealers  and  users,  but  claim  to  maintain 
sufficient  differential  to  protect  each  branch  of  the  trade." 

"  Sell  direct  to  users  exclusively.  Formerly  sold  to  dealers, 
but  changed  policy." 


mmmi 


\ 


192  FARM-MACHINEBY  TRADE  ASSOCUHONS. 

"Affords  the  regular  dealers  the  full  measure  of  protection. 
Eefuses  under  all  conditions  to  sell  any  goods  at  retail." 

"  Sells  direct  where  it  has  no  agents  carrying  its  goods  in 
stock,  but  protects  agents  where  it  can  get  them." 

"Sells  output  to  dealers,  but  at  same  time  caters  to  the 
trade  of  liverymen,  and  on  such  sales  declines  to  pay  dealers 

commissions."  «      -  i  j 

These  records  are  kept  for  the  benefit  of  members,  and  any 
time  a  member  is  in  doubt  about  the  policy  of  a  house  with  whom 
he  is  doing  business  or  contemplates  buying  from,  he  can  get 
such  information  as  we  have  at  hand  by  simply  asking  for  it. 

For  instance,  you  may  be  buying  tanks  from  a  manufacturer 
who  professes  to  be  protecting  the  dealer,  but  who  in  reality 
is  taMng  any  business  which  comes  his  way,  or  vou  may  receive 
a  letter  from  some  scale  company  stating  that  they  have  a  scale 
at  the  railroad  depot  in  a  neighboring  town  which  was  refused 
and  as  an  inducement  for  you  to  take  it  off  of  their  hands  they 
will  make  special  price,  and  if  vou  will  take  the  trouble  to  make 
inquiry,  you  can  in  most  cases  learn  the  facts. 

This  information  is  for  the  members,  and  to  make  the  work 
of  the  association  most  effective  they  should  make  use  of  it.    The 
records  are  made  up  from  reliable  information,  the  result  of  the 
most  careful  investigation. 
Present  methods  of  disseminating  information  among  dealers. — 
A  principal  aim  of  the  implement  dealers'  associations  at  present 
is  to  find  some  means  by  which  the  names  of  manufacturers  and 
wholesalers  who  are  unwilling  to  confine  their  trade  to  regular 
dealers  may  be  reported  to  members  without  incurring  legal  liability. 
As  shown  elsewhere   (see  pp.  200,  202)   the  National  Federation 
of  Implement  &  Vehicle  Dealers'  Associations  is  affiliated   with 
organizations  of  retailers  in  other  branches  of  trade  in  a  federation 
known  as  the  National  Federation  of  Retail  Merchants,  which  is  seek- 
ing an  amendment  to  the  antitrust  laws  to  make  it  lawful  for  the 
officials  of  retail  trade  associations  to  disseminate  information  of  this 
character.    The  amendment  desired  by  the  associations  would  permit 
them  to  advise  their  members  freely  regarding  so-called  violations 
by  wholesalers  of  rules  established  by  the  dealers.    If  this  effort  is 
successful,  manufacturers  and  wholesalers  whose  names  are  listed 
will  find  it  difficult  or  impossible  to  secure  business  from  dealers 
loyal  to  the  fundamental  principle  of  the  retail  associations,  namely, 
"  to  the  retail  dealer  belongs  the  retail  trade." 

Moreover,  even  now  the  dealers  are  not  without  means  of  inform- 
ing themselves  of  the  trade  policy  of  manufacturers  and  wholesalers 
wyii  whom  they  trade.  As  already  explained  (see  p.  190),  any 
member  of  any  constituent  association  of  the  National  Federation, 
upon  request  to  the  secretary  of  the  association  to  which  he  belongs, 
can  be  furnished  with  information  regarding  the  trade  policy  of  any 
particular  manufacturer  or  wholesaler.  At  the  annual  meeting  of 
the  Federation  in  1913,  an  organization  of  the  secretaries  of  the 


EESTBICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS. 


193 


4 


various  constituent  associations  was  formed  to  secure  greater  uni- 
formity in  the  activities  of  the  several  organizations,  but  it  is 
claimed  that  this  new  association  has  nothing  to  do  with  the  exchange 
of  information  regarding  the  trade  policy  of  individual  manufac- 
turers and  wholesalers,  although  it  is  conceivable  that  such  an  or- 
ganization might  furnish  a  convenient  means  of  so  doing.  Informa- 
tion so  exchanged  among  the  secretaries  would  be  available  to  any 
dealer  of  any  of  the  federated  associations,  so  far  as  the  secretaries 
of  these  associations  attempt  to  furnish  such  information  at  the 
request  of  a  member.  Furthermore,  the  secretary  of  each  association 
has  been  instructed  to  place  upon  his  mailing  list  the  names  of  the 
secretaries  of  all  the  other  associations  to  receive  copies  of  circulars 
and  documents  sent  out. 

Traveling  salesmen  of  various  manufacturers  and  wholesalers 
afford  a  possible  means  of  disseminating  information  regarding  the 
trade  policy  of  competitors,  but  this  method  does  not  seem  to  bear 
any  necessary  relation  to  the  activity  of  the  dealers'  association. 

Another  source  from  which  dealers  might  obtain  information  of 
this  character  has  been  the  columns  of  The  Commercial  News,  a  trade 
journal  published  at  Sioux  Falls,  S.  Dak.  This  journal,  which 
appears  to  have  some  circulation  among  implement,  vehicle,  and 
hardware  dealers,  has  maintained  a  printed  list  of  manufacturers  and 
jobbers  alleged  to  be  unfair  to  dealers,  and  also  a  list  of  those  sup- 
posed to  be  loyal. 

In  1911  the  Eastern  Dealer,  an  implement  trade  paper  published 
at  Philadelphia,  which  was  engaged  in  aggressive  opposition  to 
sales  by  manufacturers  to  farmers'  cooperative  stores,  printed  a  list 
of  manufacturers  who  were  alleged  to  be  selling  to  a  cooperative 
store  in  Lancaster  County,  Pa.,  and  quoted  two  of  these  manufac- 
turers as  declaring  that  they  would  continue  to  do  so.  According 
to  the  paper,  the  other  concerns  listed  had  promised  to  investigate 
the  situation.  It  was  stated  that  their  names  would  be  retained  on 
the  list  or  removed  according  to  their  decision.  The  paper  requested 
dealers  who  knew  of  other  lines  so  sold  to  send  the  facts  to  the  paper 
for  publication. 

Section  5.  Opposition  to  mail-order  or  catalogue  houses. 

Sales  ix)  mail-order  houses  by  manufacturers. — A  determined 
fight  has  been  made  by  the  organized  dealers  against  mail-order  or 
catalogue  houses.  In  January,  1896,  the  members  of  the  Western 
association  pledged  themselves  as  an  association  and  as  individuals 
not  to  patronize  or  have  any  dealings  with  any  manufacturer  or 
jobber  who  sold  goods  to  catalogue  houses,  and  it  was  decided  that 
every  such  manufacturer  should  be  reported  at  least  quarterly  to 

68248°— 15 Vt 


'A 


194 


VABM-MACHINEBY  TBADE  ASSOCIATIONS. 


RESTRICTION  OP  RETAIL  TRADE  TO  RETAIL  DEALERS. 


195 


each  member  by  the  secretary.  The  secretary  took  this  matter  up 
by  correspondeiice  with  various  manufacturers,  all  of  whom  were 
reported  to  have  promised  cooperation  in  keeping  their  goods  out 
of  the  hands  of  catalogue  houses.  It  was  announced  that  several 
concerns  had  notified  their  jobbers  not  to  sell  any  goods  to  such 
houses.  In  April,  1898,  a  list  of  manufacturers  who  had  made 
affidavits  that  they  did  not  sell  to  catalogue  houses  was  published 
in  the  Implement  Dealers'  Bulletin,  the  official  paper  of  the  Western 
association,  and  in  January,  1899,  that  association  authorized  the 
payment  of  $10  for  the  presentation  of  satisfactory  evidence  of  the 
sale  of  goods,  directly  or  indirectly,  to  any  catalogue  house  by  any 
manufacturer  or  jobber  who  sold  or  sought  to  sell  any  part  of  his 
goods  to  regular  dealers  anywhere.  In  January,  1900,  representa- 
tives of  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers,  the  Carriage  Builders  National  Association, 
the  Kansas  City  Implement,  Vehicle  &  Hardware  Club,  and  the 
Western  association  held  a  conference  and  recommended  that  manu- 
facturers abstain  from  selling  goods  to  catalogue  houses  (see  p.  134). 
Shortly  afterwards  this  resolution  was  indorsed  by  the  National 
Association  of  Agricultural  Implement  &  Vehicle  Manufacturers. 
One  of  the  leading  trade  papers  urged  dealers  to  refuse,  unitedly 
and  peremptorily,  to  handle  the  goods  of  manufacturers  who  sold 
to  catalogue  houses.  It  recommended  the  formation  of  a  general 
catalogue  house  committee  to  discover  such  manufacturers  and 
furnish  their  names  to  dealers  in  order  that  the  latter  might  avoid 
buying  from  them.  It  also  advised  the  dealers  to  obtain  the  cata- 
logues of  the  mail-order  houses  for  the  purpose  of  establishing  facts 
in  regard  to  sales  to  such  houses  by  different  manufacturers  and  to 
cooperate  with  other  associations  for  the  suppression  of  such  trade. 

The  members  of  other  implement  dealers'  associations  besides  the 
Western  pledge  themselves  not  to  buy  from  manufacturers  or  jobbers 
who  supplied  goods  to  catalogue  houses.  In  1902  action  of  this  kind 
was  taken  by  the  Illinois  Implement  Dealers'  Association,  whose 
members  were  reported  to  have  also  agreed  not  to  buy  from  wholesale 
dealers  who  handled  goods  made  by  manufacturers  who  supplied 
catalogue  houses.  One  of  the  objects  in  forming  the  National  Fed- 
eration was  to  bring  the  influence  of  all  the  associations  to  bear  to 
keep  manufacturers  from  selling  to  catalogue  houses. 

In  1904  and  1905  the  Implement  Dealers'  Bulletin  reported  that 
several  large  jobbing  houses  at  Kansas  City  had  announced  that  they 
would  not  sell  to  catalogue  houses. 

In  the  early  part  of  1907,  Judge  Carland,  of  the  United  States 
Circuit  Court,  District  of  South  Dakota,  rendered  a  decision  holding 
that  retail  dealers  had  a  lawful  right  to  agree  among  themselves  not 


r> 


o 


m 


# 


w 


to  purchase  merchandise  from  wholesalers  and  jobbers  who  sold  to 
catalogue  houses,  and  to  inform  each  other  as  to  what  wholesalers 
and  jobbers  sold  to  such  houses.  The  court  also  held  that  letters  sent 
out  by  the  secretary  of  the  defendant  association,  under  instructions 
of  the  board  of  directors,  requesting  the  cooperation  of  various  whole- 
salers and  jobbers,  urging  them  to  refuse  to  sell  to  mail-order  houses 
and  confine  their  trade  to  the  "  legitimate  "  retail  dealer,  did  not  in- 
volve undue  restriction  on  the  right  of  the  catalogue  house  to  carry 
on  its  business  free  from  intimidation  or  coercion,  because  "  it  is  not 
unfair  competition,  intimidation,  or  coercion  for  a  combination  to 
interfere  with  this  right  by  persuasion  or  any  peaceable  means." 
(Montgomery  Ward  &  Co.  v.  South  Dakota  Retail  Merchants'  and 
Hardware  Dealers'  Association  and  others,  150  Fed.  Rep.,  413.) 

This  decision  apparently  led  the  directors  of  the  Western  association 
to  undertake  arrangements  for  the  appointment  of  a  joint  committee 
of  dealers  and  wholesalers  to  cooperate  in  plans  to  meet  catalogue- 
house  competition.  Furthermore,  to  ascertain  the  identity  of  fac- 
tories which  were  supplying  catalogue  houses  as  well  as  selling  to 
dealers,  the  secretary  of  the  Federation  undertook  the  compilation 
of  a  list  of  all  catalogue  houses  that  sold  any  class  of  goods  likely 
to  be  handled  by  members  of  the  constituent  associations  of  the 
Federation.  The  secretaries  of  the  latter  organizations  were  ap- 
pealed to  for  assistance  as  well  as  the  members  of  the  National  Asso- 
ciation of  Agricultural  Implement  &  Vehicle  Manufacturers. 

In  October,  1908,  the  dealers  belonging  to  the  Federation  re- 
quested the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers  to  request  its  members  to  absolutely  discon- 
tinue the  sale  of  goods  to  catalogue  houses,  and  it  was  suggested 
that  such  sales  should  disqualify  any  manufacturer  for  membership 
in  tho  association.  Moreover,  an  editorial  in  the  Implement  Dealers' 
Bulletin  shortly  afterwards  pointed  out  that  dealers  ought  to  bestow 
their  patronage  where  the  dealer  was  recognized  as  a  necessary  link 
in  the  chain  of  distribution. 

The  policy  of  the  National  Federation  at  that  time  was  stated  to 
be  one  of  persuasion.  It  was  asserted  that  the  dealers  wanted  the 
National  Association  of  Agricultural  Implement  &  Vehicle  Manu- 
facturers, most  of  whose  members  confined  their  sales  to  dealers,  to 
show  the  minority  the  injustice  of  selling  to  catalogue  houses  while 
selling  to  dealers.  While  no  systematic  campaign  appears  to  have 
been  undertaken  by  any  of  the  manufacturers'  associations  at  this 
time,  it  seems  to  have  become  an  unwritten  qualification  for  member- 
ship that  the  members  should  confine  their  sales  to  retailers. 

Until  1908  the  active  opposition  of  the  dealers'  associations  toward 
mail-order  houses  was  largely  confined  to  efforts  to  prevent  the  en- 
actment of  parcel-post  legislation  and  to  shut  off  the  sources  from 


196 


FARM-MACHINERY  TRADE  ASSOCIATIONS. 


which  the  latter  concerns  were  supplied  with  goods.  As  a  part  of 
the  earlier  plans  to  induce  manufacturers  not  to  sell  to  mail-order 
houses  by  the  withdrawal  of  the  dealers'  patronage,  it  was  neces- 
sary to  advise  the  members  of  the  dealers'  association  as  to  the 
names  of  such  manufacturers,  and  in  this  connection  the  same  dif- 
ficulty presented  itself  as  to  the  use  of  methods  that  were  safely 
within  the  law  as  in  reporting  the  names  of  manufacturers  selling 
directly  or  to  irregular  dealers.  (See  p.  185.)  I^ess  hesitation  was 
felt  in  regard  to  the  circulation  of  the  names  of  those  concerns  whose 
avowed  policy  was  to  sell  directly.  After  it  became  evident  that  the 
Information  Bureau  of  the  National  Federation  could  not  safely 
disseminate  among  the  dealers  generally  the  names  of  manufacturers 
who  persisted  in  selling  a  part  or  the  whole  of  their  product  to  cata- 
logue houses,  efforts  were  made  to  devise  some  means  by  which  the 
dealers  could  be  advised  more  directly  and  definitely  of  the  names  of 
these  manufacturers  and  wholesalers.  In  a  general  letter  to  members 
in  June,  1910,  the  secretary  of  the  Western  association  called  atten- 
tion to  the  fact  that  the  names  of  such  jobbers  and  manufacturers 
could  not  be  listed  or  published,  but  that  members  could  obtain  infor- 
mation by  asking  the  secretary  for  it.  Most  manufacturers  seem  to 
have  been  in  sympathy  with  the  efforts  of  the  dealers  to  curtail  the 
sales  of  the  mail-order  houses,  but  some  manufacturers  furnished 
them  with  goods. 

In  January,  1910,  the  manufacturers'  and  dealers'  associations 
became  alarmed  over  the  announcement  that  one  of  the  large 
Chicago  mail-order  houses  had  purchased  a  well-known,  established 
factory  making  plows  and  other  farm  implements,  and  unsuccessful 
protests  were  made  to  prevent  the  exhibit  of  its  products  at  the 
Illinois  State  Fair,  but  it  is  claimed  that  greater  success  attended 
similar  efforts  to  prevent  the  exhibition  of  its  products  at  fairs  m 

Iowa  and  Minnesota. 

At  the  conventions  of  the  various  associations  of  implement  deal- 
ers during  the  season  of  1912-13  indorsement  was  given  to  a  bill 
introduced  in  Congress  making  it  compulsory  for  manufactured 
articles  to  be  branded  with  the  name  of  the  maker.  At  these  con- 
tentions special  reference  was  made  to  the  protection  which  the  bill 
was  calculated  to  afford  retail  dealers  against  the  competition  of 
mail-order  houses  by  revealing  the  name  of  manufacturers  who  sold 
goods  to  mail-order  houses.  In  its  original  form  the  bill  did  not 
meet  with  the  approval  of  the  manufacturers,  largely  because  it 
allowed  no  exception  to  be  made  of  parts  sold  by  one  manufacturer 
to  another  for  assembling  to  make  a  complete  machine. 

During  the  last  two  or  three  years  it  has  been  customary  for  the 
various  State  and  interstate  associations  of  implement  dealers  to  con- 


41  > 
%    I    • 


^ 


RESTRICTION  OP  RETAIL  TRADE  TO  RETAIL  DEALERS.     197 

duct  a  "  question  box  "  at  their  annual  conventions.  Questions  sub- 
mitted by  individual  members  are  read  from  the  platform  by  one  of 
the  members  selected  to  conduct  the  discussion  which  ensues.  One  of 
the  questions  presented  for  consideration  of  the  Wisconsin  Retail 
Implement  &  Vehicle  Dealers'  Association,  at  its  annual  convention 
held  at  Milwaukee,  December  15-17,  1914,  was : 

What  attitude  has  the  Wisconsin  dealer  taken  towards  a  manu- 
facturer who  sells  mail  order  houses  and  the  dealers  ?  We  refer 
to  the  Hercules  Engine  Co.  of  Evansville,  Ind.,  an  exhibitor. 

It  was  understood  by  the  dealers  present  that  the  Hercules  com- 
pany was  selling  gasoline  engines  to  one  of  the  large  mail-order 
houses.  It  had  arranged  to  make  an  exhibit  of  its  products  at  the 
dealers'  convention,  notwithstanding  the  fact  that  the  dealers  ex- 
pected all  exhibitors  to  display  a  sign  provided  by  the  association  to 
the  effect  that  they  did  not  sell  to  catalogue  houses  nor  direct  to  the 

consumer. 

A  representative  of  the  Hercules  company  was  invited  to  appear 
before  the  dealers  to  explain  the  policy  of  his  company.  He  stated 
that  the  company  was  making  gasoline  engines  fcr  one  of  the  largest 
mail-order  houses  in  the  United  States,  but  that  this  engine  was  given 
a  different  name  and  was  built  along  different  lines  from  that  sold  to 
dealers,  although  both  engines  were  of  the  same  quality.  He  pointed 
out  the  advantage  to  the  company  in  selling  a  large  number  of  en- 
gines for  cash  to  the  mail-order  house.  He  declared  that  he  had 
instructed  the  company's  traveling  men  to  explain  to  every  dealer 
that  the  company  was  engaged  in  selling  to  the  mail-order  house. 

Following  this  explanation  he  answered  the  dealers'  questions 
about  his  company  and  its  trade.  After  his  withdrawal  his  state- 
ment was  discussed,  and  the  secretary  spoke  as  follows: 

♦  ♦  *  I  have  never  bought  a  dollar's  worth  of  goods  from 
any  manufacturer  that  I  knew  was  selling  either  direct  to  the 
trade  or  to  a  catalogue  house,  and  I  never  will.  We  have  a  great 
deal  of  difficulty  in  finding  out  who  these  people  are,  and  you  all 
have  that  trouble.  They  all  like  to  misrepresent  one  another  at 
times,  and  the  only  fair  and  right  and  honest  way  to  find  out  is 
to  bring  the  gentlemen  before  such  an  intelligent  body  of  men, 
and  when  he  tells  you  right  out  and  out  that  they  manufacture 
and  sell  to  the  catalogue  house,  not  to  buy  a  dollar's  worth  of 
goods  from  the  Hercules  Buggy  Co.  and  the  Hercules  Engine 
Co  and  I  would  go  farther  than  that  as  an  individual,  1  would 
try  to  keep  anyone  else  from  buying  from  the  manufacturer  that 
sells  to  the  mail  order  people,  because  we  have  nothing  in  com- 
mon with  them.  They  advertise  in  their  catalogue  that  the 
dealer  is  robbing  the  consumer,  and  they  tell  it  m  so  many  plain 
words  in  their  catalogue,  and  they  never  lose  an  opportunity  to 
get  a  swipe  at  a  dealer  because  they  say  that  our  price  is  so  much 
and  the  dealer's  price  is  so  much  and  he  is  robbing  you  all.     I  hey 


198 


FARM-MACHINEBY   TBADE  ASSOCIATIONS. 


will  print  an  article  of  that  kind  to  deceive  the  consumer.  It  is 
my  duty  as  an  honest  implement  dealer  to  do  all  I  can  to  prevent 
my  brother  dealer  from  buying  from  them. 

Later,  he  again  addressed  the  dealers  as  follows : 

Your  secretary  is  going  to  have  this  published  in  the  trade 
papers  verbatim.  We  want  every  dealer  in  the  United  States 
to  Know  the  truth,  what  is  the  reputation  and  the  business  prac- 
tice of  this  company  and  just  exactly  what  they  are  doing,  then 
it  is  up  to  the  individual  to  decide  whether  he  will  protect  a  loy:il 
retail  trade. 

I  would  move  you  that  the  matter  be  lef erred  to  the  resolutions 
committee,  with  instructions  to  bring  in  a  resolution  stating 
plainly  what  the  attitude  of  the  organized  dealer  should  be  in 
regard  to  the  sale  of  goods  manufactured  by  the  Hercules  Gas 
Engine  Co. 
In  connection  with  this  matter  the  association  adopted  the  follow- 
ing resolution: 

The  practice  of  certain  manufacturers  who  sell  their  product 
to  catalogue  and  mail  order  houses  and  at  the  same  time  solicit 
the  trade  of  the  regular  retail  dealer,  cannot  be  too  strongly  con- 
demned.   Even  if  they  do  make  a  cheaper  and  inferior  article 
for  the  catalogue  house  trade  and  brand  it  under  a  different 
name,  we  deem  it  a  bad  business  policy  for  the  regular  dealer  to 
patronize  such  a  manufacturer,  and  the  dealer  who  desires  to 
protect  his  customers  as  well  as  himself  should  handle  only  first- 
class  goods  manufactured  by  those  who  are  loyal  to  the  retail 
trade.    The  catalogue  and  mail  order  houses  contribute  nothing 
toward  the  advancement  and  development  of  the  rural  communi- 
ties.   They  pay  no  taxes,  render  no  service,  nor  do  they  help  to 
carry  the  burdens  usually  borne  by  the  dealers  and  consumers  in 
tiio  small  towns  and  agricultural  sections  of  our  state.    And  if 
we  would  maintain  our  schools,  churches  and  public  institutions 
of  all  kinds,  and  develop  and  expand  the  resources  of  our  several 
localities,  we  must  see  to  it  that  we  protect  not  only  our  own 
interests,  but  those  of  our  customers,  by  offering  to  our  trade 
articles  of  real  worth  and  merit,  and  at  a  price  consistent  with 
fair  and  reasonable  profits,  and  manufactured  by  those  whom  we 
know  to  be  fair  and  honest  in  their  dealings  with  the  regular 
trade. 
Parcel-post  legislation.— The  establishment  of  a  parcel-post  sys- 
tem was  opposed  on  the  ground  that  it  would  aid  the  catalogue  houses 
and  be  of  little  benefit  to  anyone  else.    The  various  dealei-s'  associa- 
tions inaugurated  a  vigorous  campaign  of  opposition  to  the  enact- 
ment of  such  legislation,  and  petitions  of  protest  were  circulated. 
It  was  claimed  that  the  efforts  of  the  dealers  led  to  a  change  in  the 
attitude  of  many  manufacturers.     In  1903  it  was  reported  that  offi- 
cers of  the  various  constituent  associations  of  the  Federation  had 
addressed  letters  to  Senators  and  Representatives  in  Congress  from 
their  respective  States,  protesting  against  the  adoption  of  a  proposed 


/ 


EESTRICTION  OP  RETAIL  TRADE  TO  RETAIL  DEALERS. 


199 


amendment  to  the  post-office  appropriation  bill  to  provide  for  an  ex- 
perimental parcel  post  and  calling  attention  to  petitions  that  had 
previously  been  forwarded  to  them.  Manufacturers  and  jobbers 
were  urged  to  aid  the  dealers.  A  little  later  the  secretary  of  the  Fed- 
eration, in  a  general  letter  to  secretaries  of  the  various  constituent 
associations,  claimed  that  some  time  previously,  through  the  efforts 
of  the  dealers'  Federation,  the  manufacturers  belonging  to  the  Na- 
tional Association  of  Agricultural  Implement  &  Vehicle  Manufac- 
turers had  adopted  a  resolution  instructing  the  legislative  committee 
of  that  association  to  do  everything  they  could  in  opposition  to  a 
parcel-post  bill,  although  a  resolution  indorsing  the  bill  had  previ- 
ously been  prepared  for  adoption.  Members  of  the  constituent 
associations  of  the  Federation  were  urged  to  renewed  efforts  to 
defeat  the  bill  by  personal  interviews  or  correspondence  with  their 
Members  of  Congress,  and  it  was  reported  that  the  manufacturers 
belonging  to  the  National  Association  of  Agricultural  Implement  & 
Vehicle  Manufacturers  had  adopted  a  similar  plan. 

During  this  period  the  implement  dealers'  association  kept  up  a 
constant  agitation  against  parcel-post  legislation,  and  it  was  re- 
ported that  the  officials  of  the  implement  dealers'  Federation  were 
working  in  harmony  with  the  National  Hardware  Dealers'  Associa- 
tion and  other  dealers'  organizations  in  outlining  plans  for  placing 
the  dealers'  side  of  the  case  before  Congress. 

A  new  line  of  attack  on  parcel-post  legislation  was  proposed  in 
the  early  part  of  1908,  namely,  an  attempt  to  cultivate  a  sentiment 
among  the  farmers  opposing  such  legislation.  A  plan  of  this  sort 
had  been  suggested  ten  years  before  by  members  of  the  Nebraska 
&  Western  Iowa  Implement  Dealers'  Association,  who  proposed 
arrangements  for  meetings  of  the  farmers  to  explain  the  damage 
done  to  local  communities  by  trading  with  catalogue  houses.  Little 
progress,  however,  seems  to  have  been  made  along  this  line. 

In  February,  1909,  the  secretary  of  the  Federation  wrote  the  sec- 
retaries of  the  various  constituent  associations  that  the  outlook  in 
regard  to  parcel-post  matters  was  not  favorable,  and  he  admonished 
the  secretaries  to  see  that  their  Senators  were  "bombarded"  with 
protests  at  once.  He  also  requested  the  assistance  of  the  Kansas  City 
implement  jobbers'  club,  asking  that  its  members  telegraph  their 
Senators  protesting  the  enactment  of  a  resolution  for  an  experi- 
mental parcel  post  in  four  counties. 

Early  in  1910  a  committee  representing  various  trade  organiza- 
tions, including  those  of  the  retail  implement  and  vehicle  dealers, 
appeared  before  a  subcommittee  of  the  Committee  on  Post  Office 
and  Post  Roads  of  the  United  States  House  of  Representatives  to 
oppose  the  various  parcel-post  bills  that  had  been  referred  to  that 


200 


FABM-MACHINERY  TBADE  ASSOCIATIONS. 


committee.  This  committee  did  not  confine  its  efforts  to  the  mem- 
bers of  the  Postal  Committee,  but  lost  no  opportunity  to  explain  the 
dealers'  position  to  other  Congressmen.  It  was  thought  that,  even 
if  the  Postal  Committee  should  make  a  favorable  report,  enough 
uncertainty  existed  in  the  minds  of  Congressmen  regarding  the 
advisability  of  enacting  such  legislation  to  prevent  any  action  at 
that  session  of  Congress.  In  October,  1910,  the  Federation  gave 
instructions  that  whenever  it  became  necessary  a  representative 
should  be  sent  to  Washington  to  look  after  the  interests  of  the 
implement  dealers. 

Early  in  1911  it  was  announced  that  an  organization,  known  as 
the  American  league  of  Associations,  had  been  formed  to  guide  the 
organizations  of  manufacturers,  jobbers,  and  dealers  in  various 
lines  and  direct  the  campaign  against  parcel-post  legislation.  In 
February,  1911,  the  secretary  of  the  Federation  of  implement  deal- 
ers' associations  in  a  general  letter  to  the  secretary  of  each  of  the 
constituent  associations  stated  that  the  league  had  prepared  a  peti- 
tion protesting  against  parcel-post  legislation,  that  should  be  signed 
by  every  merchant  and  professional  man  in  the  United  States.  He 
insisted  that  the  implement  dealers'  Federation  must  do  its  part  in 
the  distribution  of  this  petition. 

In  the  latter  part  of  1911  a  general  federation  of  national  organ- 
izations of  retailers  in  various  lines  was  organized  at  Chicago  for 
the  purpose  of  stopping  legislation  inimical  to  retail  merchants  and 
to  promote  legislation  for  their  advancement.  The  project  for  this 
association  appears  to  have  originated  with  the  secretary  of  the 
Michigan  Retail  Lumber  Dealers'  Association,  who  was  subse- 
quently selected  by  a  committee  of  the  Lumber  Secretaiies'  Bureau 
to  develop  the  idea  by  correspondence  with  different  interests  in 
the  United  States.  Some  correspondence  passed  with  the  secre- 
tary of  the  implement  dealers'  National  Federation,  and  the  latter 
also  discussed  the  project  yvith  the  secretary  of  the  Southwestern 
Lumber  Dealers'  Association.  It  was  pointed  out  that  if  such  a 
federation  became  powerful  enough  it  could,  among  other  things, 
prevent  the  enactment  of  a  parcel-post  bill.  It  could  also  work  for 
a  modification  of  the  Sherman  Antitrust  Law  to  allow  the  retail 
merchants  to  maintain  their  organizations  in  order  to  exchange 
information  regarding  the  source  of  catalogue-house  competition. 
The  meeting  at  which  this  new  federation,  known  as  the  National 
Federation  of  Retail  Merchants,  was  formed,  was  attended  by  rep- 
resentatives of  the  implement  dealers'  National  Federation.  The 
executive  committee  of  the  latter  Federation  was  authorized  to  take 
such  action  as  it  deemed  best  in  reference  to  becoming  affiliated  with 
the  new  federation,  of  which  the  secretary  of  the  implement  dealers' 
Federation  was  elected  a  director. 


i^^\ 


EESTRICTION  OF  RETAIL  TBADE  TO  RETAIL  DEALERS.     201 

During  1911  and  1912  the  secretary  of  the  implement  dealers' 
Federation  issued  several  letters  to  the  secretaries  of  the  constituent 
associations  relative  to  the  matter  of  parcel-post  legislation.  A  rep- 
resentative of  the  Federation  also  appeared  before  the  Senate  Com- 
mittee on  Post  Offices  and  Post  Roads  to  oppose  such  legislation, 
and  it  was  announced  that  the  secretary  of  the  American  League  of 
Associations  had  established  headquarters  in  Washington,  where  he 
was  working  early  and  late  in  daily  communication  with  all  tha 
associations  of  dealers  that  were  sending  him  any  assistance. 

In  March,  1912,  the  prospect  for  the  enactment  of  parcel-post 
legislation  apparently  became  so  certain  that  the  secretary  of  the 
implement  dealers'  Federation,  and  also  the  secretary  of  the  Na- 
tional Federation  of  Retail  Merchants,  sent  out  an  appeal  to  those 
opposed  to  such  legislation  to  urge  their  representatives  at  Wash- 
ington to  do  everything  in  their  power  to  secure  the  appointment  of 
a  commission  to  make  a  thorough  investigation  of  the  subject  before 
any  legislation  was  enacted. 

Members  of  the  constituent  associations  of  the  implement  dealers' 
Federation  were  urged  to  arrange  at  once  with  their  local  newspa- 
pers to  print  articles  that  had  been  furnished  them  for  the  purpose  of 
building  up  a  sentiment  among  the  readers  of  country  newspapers 
against  the  parcel  post.  It  was  pointed  out  to  the  dealers  that  the 
local  newspaper  editor  would  be  glad  to  publish  one  of  these  articles 
each  week  at  the  dealers'  request,  especially  if  the  latter  were  adver- 
tising in  the  paper.  Members  of  the  implement  dealers'  Federation 
and  of  the  National  Implement  &  Vehicle  Associi«tion  were  urged  to 
write  their  Congressmen  to  indorse  the  commission  plan. 

The  efforts  of  the  dealers  to  prevent  the  enactment  of  parcel-post 
legislation  proved  futile,  but  the  Implement  Dealers'  Bulletin,  in  re- 
ferring to  the  law  establishing  a  zone  system,  stated  that  it  was  the 
least  injurious  to  the  retail  merchants  of  any  that  had  been  proposed. 
Dealers  were  admonished,  however,  to  keep  up  their  organizations 
to  try  to  prevent  any  changes  that  would  be  still  more  injurious. 
Subsequently  the  National  Federation  of  Retail  Merchants  adopted 
a  resolution  favoring  a  revision  of  the  postal  laws  so  that  the  carry- 
ing charge  for  the  different  classes  of  mail  should  be  sufficient  to 
maintain  each  department  without  financial  assistance  from  any 
other  source.  This  movement  had  already  been  indorsed  at  a  meet- 
ing of  the  implement  dealers'  National  Federation  in  connection  with 
a  recommendation  to  the  secretary  of  the  Federation  to  use  every 
effort,  both  directly  and  through  other  organizations,  to  secure  the 
enactment  of  a  1-cent  letter  postage  law.  Arrangements  were  also 
made  for  each  member  of  the  various  implement  associations  to  re- 
ceive literature  on  the  subject  direct  from  the  National  One  Cent 


i 


%m 


FABM-MAOHINEBY  TBABE  ASSOCIATIONS. 


Letter  Postage  Association.    This  cunpaign  was  intended  to  bring 
about  increased  charges  on  parcel-post  matter. 

In  the  meantime  the  National  Federation  of  Retail  Merchants  had 
held  a  meeting  at  St.  Louis  in  November,  1912,  at  which  resolutions 
were  adopted,  demanding  legislation  by  Congress  to  permit  coopera- 
tion among  retailers  to  protect  against  outside  competition,  and 
pledging  the  support  of  the  Federation  to  all  efforts  in  this  direction. 
Another  meeting  was  held  in  December,  1913,  and  shortly  afterwards 
i«presentatiyes  of  the  National  Federation  of  Retail  Merchants  vis- 
ited Washington  to  present  arguments  in  favor  of  legislation  allow- 
ing retailers  to  join  forces  for  the  purpose  of  obtaining  and  furnish- 
ing each  other  with  information  regarding  the  acts  and  selling  poli- 
cies of  wholesalers.  A  representative  of  this  organization  is  reported 
to  have  disclaimed  any  intention  on  the  part  of  the  dealers  to  use  this 
information  to  institute  boycotts. 

Legislation  against  misrepresentation  in  advertising. — ^It  is 
claimed  by  dealers,  trade  papers,  and  manufacturers  who  sell 
through  dealers  that  advertising  matter  of  mail-order  houses  is  fre- 
quently misleading  in  representations  as  to  the  character  and  quality 
of  goods.  In  October,  1911,  the  secretary  of  the  implement  dealers' 
Federation  called  attention  to  an  agitation  that  had  been  begun 
to  secure  the  enactment  of  laws  prohibiting  misrepresentation  in 
advertisements,  and  in  this  connection  he  pointed  out  that,  as  such  a 
law  would  benefit  retailers  in  all  lines  in  their  struggle  with  mail- 
order houses,  it  seemed  an  opportune  time  for  the  Federation  to  take 
steps  to  give  an  impetus  to  the  movement.  At  this  meeting  of  the 
delegates  of  the  various  implement  dealers'  associations  the  secretary 
of  the  American  League  of  Associations  explained  a  bill  that  had 
been  introduced  in  Congress  at  the  request  of  a  retail  merchants' 
association  in  Iowa.  The  delegates  indorsed  the  movemejit  and  urged 
action  at  the  coming  conventions  of  the  constituent  associations. 

The  possibilities  of  legislation  to  aid  dealers  in  competition  with 
mail-order  houses  had  been  called  to  the  attention  of  the  secretary 
of  the  implement  dealers'  National  Federation  by  the  secretary  of  the 
Southwestern  Lumber  Dealers'  Association  in  outlining  the  field  for 
the  proposed  general  federation  of  retailers.  At  the  meeting  at 
which  this  general  federation  was  organized  the  movement  for  a  pure- 
advertising  law  aroused  considerable  interest,  and  it  was  reported  that 
the  opinion  was  expressed  that  the  passage  of  such  a  law  would  de- 
prive the  mail-order  interests  of  ''one  of  their  strongest   trade 

pullers.'' 

The  movement  was  indorsed  at  the  conventions  of  the  various  im- 
plement dealers'  associations,  and  also  aroused  the  interest  of  the 
secretary  of  the  National  Implement  &  Vehicle  Association,  who 
issued  a  bulletin  to  ascertain  the  opinion  of  the  members  as  to  whether 


RESTRICTION   OF  RETAIL  TRADE   TO  RETAIL  DEALERS.  203 

the  association  as  an  organization  should  lend  its  support  to  the 
passage  of  such  a  law  in  the  several  States  or  as  a  National  measure. 
In  April,  1912,  it  was  reported  that,  in  compliance  with  the  request 
of  the  implement  dealers'  National  Federation,  the  National  Imple- 
ment &  Vehicle  Association  was  using  its  best  efforts  to  build  up  sen- 
timent in  favor  of  such  a  law.  The  matter  was  discussed  at  the 
conference  between  representatives  of  the  manufacturers  and  the  deal- 
ers at  Kansas  City  in  January,  1912,  and  also  in  October,  1912,  by 
ihe  delegates  to  the  annual  meeting  of  the  implement  dealers'  Na- 
tional Federation.  At  the  latter  meeting  resolutions  were  again 
adopted  favoring  such  legislation,  urging  prompt  action  at  the  com- 
ing conventions  of  the  constituent  associations  and  other  active  meas- 
ures to  secure  the  enactment  of  this  law  and  others,  including  that 
relating  to  the  branding  of  goods  with  the  maker's  name,  and  also 
to  a  peddler's  license  law.  Furthermore,  the  National  Federation  of 
Retail  Merchants  shortly  afterwards  adopted  a  resolution  urging  the 
officers  and  directors  of  all  retail  associations  to  tajje  immediate  steps 
to  secure  the  passage  of  an  honest-advertising  law  in  the  several 
States  to  pave  the  way  for  similar  legislation  by  Congress. 

Farm-paper  advertising. — Another  method  proposed  by  the  imple- 
ment dealers'  associations  to  curtail  the  advertising  facilities  of  mail- 
ofder  houses  has  been  to  persuade  publishers  of  various  papers  to 
exclude  the  advertisements  of  catalogue  houses  from  their  colunms. 
In  1899  an  article  published  in  the  Implement  Dealers'  Bulletin 
advised  the  dealers  to  see  if  they  could  not  make  their  local  news- 
paper men  see  the  effect  of  mail-order  trading  upon  local  merchants 
in  the  same  light  in  which  it  was  viewed  by  the  latter,  and  in  this 
way  it  was  thought  that  the  effort  to  exclude  such  advertising  would 
be  successful.    Subsequently  several  of  the  implement  trade  papers 
announced  the  adoption  of  a  policy  of  refusing  advertisements  from 
manufacturers  who  were  supplying  goods  to  catalogue  houses,  and 
the  secretary  of  the  Federation  in  writing  to  the  editor  of  one  of 
these  papers  stated  that  he  had  had  considerable  correspondence  in 
regard  to  this  particular  matter  and  hoped  that  it  would  result  in 
the  exclusion  of  this  kind  of  advertising.    Furthermore,  in  October, 
1909,  the  delegates  to  the  implement  dealers'  National  Federation 
held  a  conference  with  representatives  of  the  trade  press  to  devise 
plans  to  furnish  the  papers  pledged  to  protect  the  dealers  with  in- 
formation in  regard  to  concerns  who  sold  directly  to  users  and  to 
catalogue  houses,  while  at  the  same  time  soliciting  the  trade  of 
dealers.     While  the  representatives  of  the  papers  expressed  sym- 
pathy with  the  objects  sought,  no  formal  action  appears  to  have  been 

taken. 

An  interesting  phase  of  the  situation  has  developed  from  an  effort 
by  the  dealers  to  persuade  manufacturers  selling  through  the  dealer 


204 


FABM-MACHINEBY  TKADE  ASSOCIATIONS. 


to  refrain  from  advertising  in  farm  papers  that  also  publish  adver- 
tisements of  catalogue  houses.  Early  in  1910  the  secretary  of  the 
Federation  in  writing  to  the  various  other  secretaries  stated  that 
information  had  been  received  that  a  certain  farm  paper,  the  name  of 
which  was  given,  was  writing  to  some  of  the  officers  of  the  dealers' 
associations,  asking  if  the  dealers  would  not  encourage  manufacturers 
to  advertise  more  liberally  in  farm  papers.  In  this  connection,  the 
secretary  of  the  Federation  advised  each  secretary  that  if  the  latter 
should  receive  one  of  these  letters  he  should  in  his  reply  state  that, 
since,  as  a  rule,  the  patronage  of  farm  papers  seemed  to  be  princi- 
pally that  of  mail-order  houses,  the  manufacturers  felt  that  they 
owed  it  to  the  regular  dealer  to  refrain  from  advertising  in  such  a 

medium. 

The  matter  was  brought  up  in  January,  1911,  at  a  conference  be- 
tween representatives  of  the  dealers'  associations  and  National  Im- 
plement &  Vehicle  Association.    The  manufacturers  were  asked  if 
something  could  not  be  done  to  obviate  the  practice  by  which  deal- 
ers, and  manufacturers  marketing  their  product  through  dealers, 
advertised  in  papers  that  carried  advertising  for  catalogue  houses 
and  direct-selling  concerns— advertising  that  worked  against  the 
interest  of  the  local  merchant.    There  ^as  some  discussion  of  the 
subject,  but  no  formal  action  was  taken.    A  few  weeks  later  the 
executive  committee  of  the  National  Implement  &  Vehicle  Associa- 
tion decided  to  ascertain  from  the  members  as  to  articles  or  edi- 
torials appearing  in  farm  papers  detrimental  to  the  interest  of  the 
members  of  the  association  and  then  to  take  the  matter  up  further 
with  members  advertising  in  such  papers.    In  the  discussion  by 
members  of  the  committee  it  was  brought  out  that  some  of  the  edi- 
torials in  a  number  of  the  farm  papers  amounted  to  a  strong  recom- 
mendation to  their  readers  to  patronize  the  catalogue  houses  and 
direct-selling  manufacturers.    Any  desire  to  dictate  or  suggest  the 
policy  of  such  papers  in  receiving  advertising  was  disclaimed,  but 
it  was  thought  that  the  implement  and  vehicle  manufacturers  whose 
advertising  was  alleged  to  furnish  the  farm  papers  with  one  of 
their  largest  sources  of  revenue  were  entitled  to  greater  considera- 
tion at  the  hands  of  the  papers.    It  was  stated  that  the  puipose  of 
canvassing  the  manufacturers  on  this  subject  was  not  to  protest  as 
an  association,  but  to  gather  and  compile  data  for  the  use  of  mem- 
bers as  purchasers  of  advertising  space.    The  various  dealers'  asso- 
ciations devoted  considerable  attention  to  the  matter  during  the 
convention  season  of   1911-12,  and  the  difficulty  of  determining 
what  papers  should  be  used  as  advertising  mediums  was  discussed 
at  conferences  between  the  manufacturers  and  dealers.    The  sec- 
retary of  the  National  Implement  &  Vehicle  Association  requested 
that  "he  be  furnished  with  the  names  of  papers  containing  edi- 


RESTRICTION  OF  RETAIL  TRADE  TO  RETAIL  DEALERS.     206 

torials  objectionable  from  this  standpoint.  In  M?rch,  1912,  the 
secretary  of  the  Federation  advised  the  secretaries  of  the  several 
constituent  associations  that  the  Federation's  agitation  was  bearing 
fruit,  and  he  asked  for  suggestions  as  to  how  to  secure  the  informa- 
tion to  make  the  work  effective.  Writing  the  secretary  of  the  Na- 
tional Implement  &  Vehicle  Association  shortly  afterwards,  he  stated 
that  a  plan  was  being  considered  of  subscribing  to  a  large  number 
of  those  papers  and  distributing  them  among  prominent  members  to 
be  read  and  clipped.  He  wrote  that  he  considered  that  much  good 
would  result  from  the  agitation. 

Further  evidence  that  the  campaign  was  producing  results  was  pre- 
sented in  1912  in  a  letter  of  the  secretary  and  general  manager  of  the 
National  Implement  &  Vehicle  Association  to  the  secretary  of  the 
dealers'  Federation,  in  which  he  said  that  he  had  received  a  state- 
ment from  one  of  the  companies  belonging  to  the  associj.tion,  saymg 
that  it  had  taken  up  the  matter  of  favoring  catalogue-house  methods, 
with  the  entire  list  of  70  papers  in  which  it  advertised  and  had 
received  a  declaration  from  each  declaring  that  editorial  indorsement 
would  not  be  given  to  mail-order  houses. 

In  August,  1913,  the  Implement  Dealers'  Bulletin  called  attention 
to  a  convention  of  the  publishers  of  country  newspapers  that  had 
just  been  held  at  Chicago,  at  which  the  subject  of  mail-order  adver- 
tising was  one  of  the  principal  topics  discussed.    The  Bulletin  stated 
that  it  had  been  the  consensus  of  opinion  that  all  such  advertismg 
should  be  eliminated,  although  a  few  of  the  delegates  took  the  posi- 
tion that  they  could  not  refuse  the  mail-order  contracts  unless  the 
merchants  gave  them  more  patronage.     Possibly,  as  the  result  of 
this  attitude  on  the  part  of  some  of  the  publishers,  the  delegates  at 
the  annual  meeting  of  the  implement  dealers'  National  Federation 
went  on  record  in  favor  of  the  manufacturers  giving  more  attention 
to  local  papers  in  placing  advertising  and  less  to  farm  papers,  after 
the  secretary  of  the  Federation  had  compared  the  relative  merits 
of  the  two  methods  of  advertising,  asserting  that  practically  every 
farm  paper  advocates,  either  directly  or  by  implication,  patronage 
of  mail-order  houses,  while  the  local  country  newspaper  helps  to 
build  up  the  trade  of  the  home  merchant.    He  declared  that  it  was  a 
ftubject  that  concerns  the  business  success  of  manufacturer,  jobber, 
and  dealer  alike.    The  subject  was  considered  at  a  conference  between 
representatives  of  the  dealers'  Federation  and  of  the  National  Im- 
plement &  Vehicle  Association  in  October,  1913,  with  a  view  to  sug- 
gesting to  manufacturers  the  advisability  of  trying  out  local  news- 
papers.   The  Illinois  implement  dealers'  association  adopted  a  reso- 
lution to  th    effect  chat  manufacturers  selling  to  dealers  should  not 
advertise  in  farm  papers  which  advocate  mail-order  buying,  and 
one  of  the  local  clubs  of  dealers  in  Kansas  appointed  a  committee  to 


.-i 


206 


FARM-MACHINERY  TRADE  ASS0GUTI0N8. 


-< 


ili 


confer  with  the  newspapers  in  the  county  to  devise  ways  and  means 
for  increasing  the  advertising  in  home  papers  and  eliminating  some 
of  the  advertisements  in  the  farm  papers.  Furthermore,  the  mem- 
bers of  the  Western  association  adopted  resohitions  expressing  the 
belief  that  a  more  liberal  use  of  the  local  county  papers  by  the  man- 
ufacturers in  advertising  their  goods  would  be  of  greater  benefit  to 
the  dealers  generally  than  the  use  of  farm  papers  and  would  elimi- 
nate much  of  the  direct  sales'  controversy. 

The  position  taken  by  the  National  Federation  of  Implement  & 
Vehicle  Dealers'  Associations  and  the  National  Implement  &  Vehicle 
Association  against  the  indorsement  by  farm  papers  of  mail-order 
houses  and  mail-order  buying  seems  to  have  had  some  success,  for  in 
December,  1914,  a  resolution  on  the  subject  was  adopted  by  the 
Agricultural  Publishers'  Association,  composed  of  about  40  of  the 
leading  farm  papers.    This  resolution  read  as  follows : 

Resolved^  That  it  is  the  sense  of  the  members  of  the  Agricul- 
tural Publishers'  Association  that  the  farm  papers  of  America 
do  exclude  from  their  colunms  copy  attacking  retail  or  whole- 
sale dealers,  assailing  advertisers  selling  either  direct  or  through 
dealers,  or  reflecting  in  any  unfair  manner  upon  a  competitor  in 
business. 

Chautauqua  home-trade  talks. — ^Another  plan  designed  to  cur- 
tail the  competition  of  mail-order  houses  had  meantime  been  put  on 
foot  by  the  National  Federation  of  Retail  Merchants.  The  idea  was 
to  build  up  sentiment  in  favor  of  home  trading  by  means  of  ad- 
dresses at  Chautauqua  meetings,  advocating  the  preservation  of  the 
retail  business  for  the  home  merchants.  In  July,  1913,  the  Imple- 
ment Dealers'  Bulletin  indorsed  the  plan  and  announced  that  the 
movement  would  be  given  all  the  encouragement  that  implement  and 
hardware  associations  were  able  to  wield.  In  October,  1913,  the 
delegates  to  the  annual  meeting  of  the  implement  dealers'  Federation 
voted  to  cooperate  with  the  National  Federation  of  Eetail  Merchants 
in  this  matter.  At  the  meeting  of  the  Western  association  in  Janu- 
ary, 1914,  the  members  adopted  resolutions  pledging  themselves  to 
assist  in  securing  as  large  an  attendance  as  possible  to  hear  the 
speakers  on  this  subject  and  instructing  the  secretary  of  the  associa- 
tion to  cooperate  with  the  Chautauqua  bureaus  in  keeping  members 
of  the  association  informed  concerning  the  dates  of  these  lectures. 


^1 


CHAPTER  Vn. 
PEEVENTION  OT  PEICE  CUTTING  AMONG  COMPETING  DEALERS. 

Section  1.  Introduction. 

In  addition  to  the  prevention  of  price  cutting,  by  suppressing  the 
competition  of  irregular  dealers  and  direct  sellers,  the  dealers'  asso- 
ciations are  concerned  with  the  maintenance  of  profitable  prices 
among  the  regular  dealers  themselves. 

Manufacturers  and  other  wholesalers  are  opposed  to  selling  to 
dealers  who  are  habitual  price  cutters.  They  desire  that  dealers 
shall  make  a  profit  in  order  that  the  latter  may  be  better  able  to 
meet  their  obligations.  Another  motive  of  the  manufacturers  and 
wholesalers,  apparently,  in  helping  to  keep  up  retail  prices  is  that 
they  may  thereby  be  able  to  charge  higher  prices  to  the  dealers. 

Section  2.  Resale  price  maintenance. 

The  dissatisfaction  of  the  dealers  with  conditions  in  the  binder 
trade  in  the  later  eighties  and  early  nineties  (see  p.  15)  led  the  deal- 
ers to  request  manufacturers  and  wholesalers  to  establish  and  main- 
tain uniform  prices.  In  January,  1891,  the  members  of  the  Western 
association  adopted  a  resolution  expressing  the  sense  of  the  conven- 
tion that  the  manufacturer  should  cancel  the  contract  of  any  retail 
dealer  who  was  found  to  be  cutting  prices  during  the  season.  Its 
members  sought  the  cooperation  of  the  Kansas  City  jobbers.  These 
efforts  caused  a  memorial  to  be  addressed  to  the  various  harvesting- 
machine  companies  by  their  representatives  at  Kansas  City,  one  of 
the  matters  presented  being  the  alleged  necessity  of  establishing  and 
maintaining  uniform  prices.    This  memorial  read  in  part  as  follows ; 

It  is  apparent  to  all  of  us  that  prices  have  been  greatly  demor- 
alized by  reports  circulated  by  unscrupulous  farmers,  canvass- 
ers and  local  dealers,  whose  sole  object  has  been  to  profit  at  the 
expense  of  the  manufacturers,  and  we  now  pray  that  you  follow 
the  example  of  the  heavier  manufacturers  and  establish  a  uni- 
form price,  both  retail  and  net  wholesale,  on  all  harvesting 
machines,  to  be  based  on  Missouri  river  freights  for  the  territory 
covered  by  our  respective  agencies,  to  be  maintained  during  the 

entire  season  of  1892. 

207 


208 


FARM-MACHINERY  TRADE  ASSOOUTIONS. 


\ 


Although  the  contracts  of  some  of  the  binder  manufacturers  con- 
tained a  provision  requiring  dealers  to  maintain  retail  prices  fixed 
by  the  manufacturers,  the  pressure  of  competition  among  the  latter 
seems  to  have  been  too  strong  for  the  strict  enforcement  of  a  pro- 
vision of  this  sort. 

At  the  annual  meeting  of  the  dealers'  Federation  in  1901,  a  year 
before  the  International  Harvester  Co.  was  organized,  a  resolution 
was  adopted  favoring  the  adoption  of  uniform  retail  prices  by  all 
the  manufacturers  of  harvesting  machinery  and  that  local  agents  be 
required  to  maintain  these  prices. 

In  1904,  the  Federation  again  requested  the  various  harvester 
manufacturers  to  establish  and  maintain  a  uniform  minimum 
retail  price  for  each  territory.  The  International  Harvester  Co. 
replied  that  it  would  insist  upon  compliance  with  clause  5  in  its 
agency  contracts,  under  which  the  agent  agreed  to  sell  all  machines 
or  property  received  under  the  contract  at  such  prices  and  on  such 
terms  as  might  be  fixed  in  writing  by  the  International  Harvester 
Co.  After  1905,  however,  this  clause  of  the  contract  was  omit- 
ted.* .  1.        1        1 

Within  recent  years  manufacturers  of  farm  machmery  have  largely 

discontinued  the  practice  of  fixing  retail  prices,  althougli  some  com- 
panies have  not  yet  done  so.  List  prices,  from  which  the  dealers 
receive  large  discounts,  are  prmted  in  the  agency  contracts  of  various 
wholesalers,  notably  those  handling  plows  and  tillage  implements. 
These  list  prices  are  sometimes  intended  to  serve  as  a  guide  to  the 
retail  dealers  in  making  their  prices.    (See  p.  43.) 

Implement  associations  have  been  more  active  in  pushing  the  cost- 
educational  movement  (see  pp.  218-243)  than  pny  other  plan  of 
retail-price  maintenance.  In  January,  1915,  however,  the  Western 
association  not  only  indorsed  the  Stevens  bill  pending  in  Congress, 
but  also  the  principle  that  the  manufacturer,  for  his  own  protection 
and  that  of  dealers,  should  have  the  right  to  set  resale  prices. 

Section  3.  Price  agreements  among  deftlen. 

Most  of  the  early  State  and  interstate  associations  of  dealers  that 
were  formed  recognized  the  difficulty  of  getting  its  members  to  adopt 
and  adhere  to  fixed  retail-price  schedules.  A  principal  objection  to 
such  efforts  lay  in  the  practical  difficulty  of  fixing  a  uniform  price  on 
farm  machines  of  different  makes,  sizes,  and  specifications,  and  secur- 
ing the  observance  of  such  prices  among  dealers  scattered  over  a  wide 
territory.    Moreover,  there  was  the  danger  of  conflict  with  the  anti- 

1  Report  of  the  CommlSBioner  of  CorporaUono  oa  tlw  IntoraaUoiua  Hanrester  Co.,  pp. 
310-315. 


-»'l 


PBEVBNTION   OF  PRICE  CUTTING  AMONG  DEALERS. 


209 


trust  laws.  Most  of  these  associations  urged  their  members  to  observe 
profitable  prices  and  not  to  cut  them,  the  practice  of  price  cutting  to 
secure  trade  being  referred  to  as  an  "unwise  and  short  sighted  policy." 
In  a  report  by  a  trade  paper  of  the  proceedings  at  the  annual  con- 
vention of  the  Western  association  in  January,  1893,  it  was  stated: 

Towards  the  close  of  the  convention  *  *  *  [one  memljer 
of  the  association]  struck  the  keynote  in  plans  for  preventing 
demoralization  in  the  retail  trade  when  he  told  of  the  agree- 
ment he  had  entered  into  with  the  dealers  in  his  town,  fixing  a 
retail  price  on  all  the  goods  they  sold. 

In  January,  1894,  the  harvester  committee  of  the  Western  associa- 
tion reported  that  the  managers  of  several  of  the  harvesting-machine 
companies  recommended  that  "the  retail  implement  dealers  should 
establish  a  uniform  retail  price  among  themselves.'* 

The  adoption  of  a  schedule  of  prices  below  which  dealers  agreed 
not  to  sell  seemed  to  assure  a  larger  profit  to  all.  But  when  such  an 
agreement  was  entered  into  the  dealer  who  cut  prices  had  a  great 
advantage  over  the  dealer  who  attempted  to  hold  to  the  agreed 
prices.  Hence,  they  generally  proved  a  failure  because  no  practicable 
means  could  be  found  to  enforce  the  agreement.  Several  instances 
have  been  found  where  price  agreements  have  bee?i  entered  into  by 
dealers  in  local  competition  with  each  other.  Most  of  these  are  of 
an  early  date,  but  others  are  more  recent. 

In  1899  dealers  in  Lancaster  County,  Nebr.,  maintained  an  agreed 
schedule  of  uniform  minimum  prices.  A  year  or  two  later  the  plan 
was  extended  to  other  dealers  in  southern  Nebraska,  the  South  Platte 
association  being  formed.  For  several  years  the  latter  association 
attempted  to  maintain  a  list  of  minimum  retail  prices  that  had  been 
prepared  by  its  president,  a  dealer  in  Lancaster  County.  In  1904  it 
was  reported  that  the  plan  was  working  well,  but  these  efforts  are 
said  to  have  led  to  the  collapse  of  the  association  a  few  years  later. 

In  September,  1903,  the  Implement  Dealers'  Bulletin  stated  that 
the  subject  of  prices  usually  occupied  some  of  the  time  at  each  meet- 
ing of  a  local  organization  that  had  been  formed  among  dealers  in 
northeastern  Kansas.  It  was  stated,  however,  that  no  ironclad  agree- 
ments were  made,  and  hence  no  penalties  were  needed.  During  1908 
dealers  in  Marshall  and  Kittson  Counties,  Minn.,  agreed  upon  a  price 
list  for  binders,  mowers,  and  rakes,  and  in  1904  two  dealers  at  War- 
ren, Minn.,  signed  a  similar  agreement.  No  information  is  avail- 
able to  indicate  the  extent  to  which  these  lists  were  adhered  to. 
Later,  dealers  in  the  vicinity  of  Olivia,  Minn.,  and  others  around 
Devil's  Lake,  N.  Dak.,  adopted  price  lists,  which,  it  is  said,  were  not 
closely  followed. 

68248"— 15 ^14 


^>   I   • 


210 


FAEM-MACHINEBY  TBAOE  ASSOCIATIONa 


! 


Ill 


In  April,  1904,  an  association  was  formed  among  dealers  in  Jack- 
•son  County,  Mich,  Later  this  association  adopted  a  resolution 
requesting  all  members  to  add  not  less  than  26  per  cent  to  the  cost 
price  to  make  a  selling  price. 

The  Fargo  District  Implement  Dealers'  Association,  consisting  of 
some  40  dealers,  organized  in  May,  1904,  to  better  conditions  in  the 
territory  about  Fargo,  N.  Dak.,  adopted  a  schedule  of  minimum  per- 
centages of  profit  on  the  cost  of  goods  sold.  On  drills  not  less  than 
20  per  cent  of  the  cost  was  to  be  added  to  the  cost  of  the  goods  plus 
freight;  on  gang  plows  and  harroWs,  15  per  cent;  on  binders,  the 
International  schedule  was  to  be  followed,  while  mowers  were  to  be 
sold  at  $46  and  $48,  according  to  size ;  on  gasoline  engines,  rakes,  and 
buggies,  at  least  25  per  cent;  while  on  twine,  not  less  than  2  cents  net 
per  pound  was  to  be  added  to  the  cost.  It  is  claimed  that  these  rules 
were  not  binding  and  that  they  were  not  closely  observed. 

An  association  organized  at  Bismarck,  N.  Dak.,  in  March,  1904, 
known  as  the  Missouri  Slope  Retail  Implement  Dealers'  Association, 
is  said  to  have  included  dealers  in  two-thirds  of  North  Dakota.  An 
important  feature  of  the  work  of  this  association  was  the  adoption 
of  retail  price  lists  in  1907  and  1909.  This  association  appears  to 
have  held  no  meetings  after  1909.  An  organization  composed  of 
four  implement  dealers  at  Dickinson,  N.  Dak.,  did  not  use  the  price 
list  furnished  by  the  Missouri  Slope  Retail  Implement  Dealers'  Asso- 
ciation, which  was  regarded  as  too  low  for  that  territory,  but  agreed 
upon  a  list  of  their  own.  A  copy  of  this  list  was  hung  in  the  store 
of  each  member  and  was  adhered  to  fairly  closely  in  1911,  according 
to  the  dealers,  though  there  was  no  penalty  for  failure  to  do  so. 

In  1908,  and  again  in  1909,  a  number  of  dealers  in  the  vicinity  of 
Grafton,  N.  Dak.,  met  and  adopted  a  list  of  retail  prices,  although 
it  is  stated  that  the  dealers  were  not  obliged  to  hold  to  these  prices. 
In  February,  1910,  members  of  an  organization  formed  at  Crookston, 
Minn.,  composed  of  dealers  in  two  adjoining  counties,  agreed  upon 
&  retail  price  list,  copies  of  which  were  distributed  among  the  dealers. 
It  is  stated  that  these  prices  were  fairly  well  maintained.  A  local 
club  of  dealers  in  Brown  County,  S.  Dak.,  is  also  reported  to  have 
made  an  agreement  on  prices. 

Doubtless  an  exhaustive  inquiry  into  the  extent  to  which  price 
agreements  have  been  entered  into  among  local  dealers  would  dis- 
close instances  in  addition  to  those  cited  above.  Enough  has  been 
said  to  show  that  this  method  of  price  maintenance  has  not  been 
unknown  to  the  retail  implement  trade. 

The  relation  of  local  clubs  to  price  agreements  is  discussed  gener- 
ally in  the  following  section,  while  further  references  thereto  may  be 
found  in  connection  with  the  cost  educational  propaganda  (see  p.  218). 


PEEVENTION  OF  PRICE  CUTTING  AMONG  DEALERS. 


211 


Section  4.  Exchange  of  information  through  local  clubs. 

At  the  annual  convention  of  the  Western  association  in  January, 
1893,  the  president  stated  that  one  of  the  greatest  evils  that  the 
dealers  had  to  contend  with  was  the  cutting  of  prices  among  them- 
selves.   In  this  connection,  he  made  the  following  suggestions : 

Maintain  your  prices.  Let  us  be  honest  in  this,  and  let  us 
transmit  this  feelmg  to  each  of  our  competitors.  By  meeting 
here,  becoming  acquainted,  and  talking  these  things  oyer,  will 
have  a  tendency  to  make  us  better  friends  and  we  will  think 
kindlier  of  our  competitors.  We  will  be  very  much  more  apt  to 
maintain  prices  ourselves,  besides  we  shall  not  hear  so  much  of 
our  neighbor  cutting  prices.  The  result  will  be  that  the  imple- 
ment business  will  be  pleasanter  and  appreciably  more  profitable. 

At  the  convention  of  the  Western  association  held  the  following 
year  (1894)  one  of  the  dealers  present  at  the  convention  urged  that 
dealers  should  cultivate  a  more  friendly  feeling  among  themselves, 
but  it  was  not  until  two  years  later  that  the  associ^ition  adopted  a 
resolution  to  the  effect  that — 

We  believe  that  local  organization  is  now  the  paramount  ob- 
ject to  be  attained  and  that  we  commend  it  to  the  wise  considera- 
tion of  all  implement  and  vehicle  dealers. 

In  March,  1896,  the  Implement  Dealers'  Bulletin  stated  that  the 

board  of  directors  of  the  Western  association  were  very  anxious  to 

have  dealers  carry  out  the  resolution  that  had  been  adopted  favoring 

local  organization.    It  had  already  been  pointed  out  (see  p.  16)  that 

it  was  not  the  province  of  the  Western  association  to  regulate  prices, 

but  it  had  also  been  asserted  that  the  elimination  of  price  cutting  was 

an  important  benefit  of  local  organizations.     In  this  connection,  an 

editorial  in  the  Implement  Dealers'  Bulletin  in   September,  1899, 

stated : 

This  association  has  never  tried  to  control  the  prices  at  which 
dealers  should  sell  their  goods,  believing  that  all  efforts  in  that 
direction  would  be  in  vain ;  but  it  certainly  can  be  of  some  service 
to  its  members  in  such  cases  by  exerting  a  friendly  influence  over 
those  who  persist  in  doing  business  for  glory  and  not  for  profit, 
and  any  such  influence  it  can  wield  to  stop  a  war  on  prices  that 
yields  absolutely  no  profits  to  those  who  engage  in  it,  should  be 
exerted.  The  association  has  already  accomplished  much  good  in 
this  direction  among  its  members  by  cultivating  a  more  friendly 
feeling  among  them.  *  ♦  *  "We  do  not  advocate  exorbitant 
prices  but  a  fair  margin  you  must  have  or  you  can  not  continue 
m  business  very  long. 

During  these  years,  however,  many  dealers  continued  to  cut  prices, 
and  in  September,  1901,  the  Implement  Dealers'  Bulletin  asserted 
that  the  binder  business  was  thoroughly  demoralized  and  that  the 


i 


212 


FARM-MACHINERY  TRADE  ASSOCIATIONS. 


II 


price  cutting  had  been  done  by  the  manufacturers.    The  Bulletin 
went  on  to  say : 

They  are  the  ones  who  went  to  their  agents  and  said, "  Here,  we 
want  this  business  and  we  want  you  to  get  it  regardless  of  price, 
and  at  settlement  time  you  will  be  rewarded  amply  for  your 
trouble." 
This  situation  apparently  led  to  the  request  to  the  harvester  manu- 
facturers to  use  their  influence  to  maintain  retail  prices.     (See  p.  — .) 
Price  cutting  among  retailers  was  discussed  in  letters  published  in 
the  Implement  Dealers'  Bulletin  during  1902.    The  remedy  proposed 
was  to  "  sell  at  fair  margins  and  quit  our  strife  and  jealousies  among 
ourselves." 

In  February,  1903,  the  Bulletin  published  a  letter  from  one  of  the 
members  of  the  Western  association  calling  attention  to  the  value  of 
personal  acquaintance  among  competing  dealers.  He  asked  the  fol- 
lowing question: 

Is  it  any  wonder  our  customers  "  work  "  us,  when  we  consider 
that  most  of  us  don't  see  our  competitor  down  street  once  a 
month  ? 
He  expressed  the  opinion  that  the  association  meetings  were  of 
some  benefit  in  this  way,  but  continued  as  follows : 

But  they  don't  get  down  to  the  sore  spot.  Nothing  ever  will 
do  that  except  personal  acauaintance,  and  the  very  bigness  of 
our  convention  meetings  makes  it  practically  impossible  to  have 
much  more  than  a  n(3  or  a  hand  shake  with  our  competitors 
while  there.    ♦    •     ♦ 

Fact  is  we've  got  to  take  this  matter  into  our  own  hands,  in  a 
local  way,  if  we  are  to  enjoy  the  full  benefit  of  trade  organiza- 
tion. *  ♦  *  Suppose  we  organize  a  social  club  among  the  deal- 
ers in  our  line,  in  each  county  or  section  of  two  or  three  counties. 
We  can  have  our  regular  officers,  constitutions,  by-laws,  dues, 
etc.  Once  a  month  will  be  often  enough  to  meet.  If  there  are  six 
good  towns  in  our  territory  we  will  meet  in  first  one  town  and 
then  another,  until  we  cover  all  six,  and  then  begin  over  again. 
Let  the  dealers  in  the  town  where  we're  going  to  meet  next,  act 
as  a  committee  on  entertainment.  Have  a  good  time  and  plenty 
of  cigars,  and  talk  over  business  propositions  while  we  smoke. 
Foot  the  bill  out  of  the  treasury,  or  let  each  member  pay  for  his 
own  plate.  Once  in  a  while  take  the  ladies,  acquaintance  among 
them  will  do  us  a  lot  of  good.  It  will  be  more  trouble  for  us  to 
get  together  than  it  is  for  the  jobbers  club,  but  the  result  will  be 
just  as  satisfactory  and  as  profitable  in  the  end.  Any  way  we've 
got  to  do  somethmg,  and  if  somebody  doesn't  suggest  a  better 
plan,  let's  try  this. 
This  letter  was  followed  by  another  published  in  the  Bulletin  in 
May,  1903,  on  the  subject  of  local  associations  as  a  remedy  for  price 
cutting.    This  letter  read  as  follows : 

The  large  membership  in  the  Western  Retail  Implement  and 
Vehicle  Dealers'  Association  is  of  itself  sufficient  evidence,  that 


! 


PREVENTION   OF  PRICE  CUTTING  AMONG  DEALERS.  213 

it  pays  the  eligible  retailer  to  be  a  part  of  such  organization. 
The  benefits  of  such  membership  are  many  and  substantial,  but 
I  wish  to  refer  to  a  single  benefit  that  in  itself  repays  many  of 
us  annually  for  the  expense  of  membership  and  attendance  at 
our  Kansas  City  convention.  I  refer  to  the  price  cutting  evil. 
While  this  has  perhaps  not  been  very  generally  discussed  in  our 
sessions  the  past  two  or  three  years,  it  is  so  generally  discussed 
amon<'  the  dealers  in  relating  business  experiences,  and  the  tolly 
of  same  so  unanimously  admitted,  that  we  return  to  our  places 
of  business  fully  determined  to  stand  for  a  reasonable  protit.  in 
fact  our  backbones  are  stiffened  up  for  several  weeks,  and  per- 
haps if  our  conventions  occurred  three  or  four  times  a  year,  the 
stiff  backbone  might  become  chronic.  ^ 

Right  here  is  where  the  local  association  meeting  once  a  month 
would  make  us  some  money.  I^t  the  big  associations  work  to- 
gether to  combat  the  general  evils  that  require  large  numbers 
and  wide  influence  to  correct,  but  the  local  association  will  do 
much  toward  "  keeping  us  good  "  in  this  particular. 

Often  what  we  need  most  to  maintain  a  fair  profat  is  a  better 
feeline  toward  our  competitors.  Some  of  us  know,  and  perhaps 
like  every  man  in  our  town  better  than  we  do  our  competitor, 
and' in  no  way  can  a  better  acquaintance  and  feeling  for  him  be 
brought  about  than  through  the  formation  of  a  local  association, 
where  we  can  meet  and  become  acquainted,  exchange  experi- 
ences profitably  and  talk  in  reasonable  confidence. 

It  enlarges  our  views  to  discuss  business  matters  frankly  with 
our  competitor.  He  is  in  a  legitimate  business  to  make  money; 
we  can't  have  all  the  business,  but  let  us  make  a  fair  profit  on 
that  we  do  have,  and  that  we  can't  get  let  him  have  on  the  same 
basis  and  stand  together  to  keep  the  business  on  a  business  plane. 

This  was  followed  by  an  editorial  on  the  subject  of  "  Local  clubs  " 
in  the  Bulletin  for  September,  1903,  which  read  in  part  as  follows : 

There  is  no  question  but  what  the  organization  of  local 
clubs  will  help  to  solve  the  price  cutting  evil  and  place  the 
implement  and  vehicle  business  upon  a  much  better  and  more 
satisfactory  basis,  that  is,  if  they  are  conducted  along  proper 
lines.  Many  dealers  shrink  from  giving  any  encouragenient 
to  a  movement  of  this  kind  because  it  usually  carries  with  it 
an  agieement  on  prices,  and  they  claim  that  such  an  agreement 
gives  the  unscrupulous  dealer  an  undue  advantage  over  the  one 
\^  ho  wishes  to  live  up  to  the  letter  of  the  agreement. 

That  they  can  be  formed  and  made  to  greatly  benefit  members 
has  been  demonstrated  by  the  dealers  of  northeast  Kansas ;  they 
went  home  from  the  last  convention  thoroughly  imbued  with  the 
idea  that  much  of  the  trouble  they  had  had  in  holding  their 
business  up  to  a  standard  which  made  it  profitable  was  on  account 
of  the  lack  of  better  acquaintance  among  the  dealers,  and  a  few 
of  them  in  discussing  the  matter  concluded  to  make  an  effort 
to  organize  the  dealers  of  their  vicinity  who  came  in  close  com- 
petition with  each  other.  A  call  was  issued  and  the  organiza- 
tion perfected.  *  ♦  ♦  They  meet  quarterly,  discuss  trade 
topics,  the  credit  of  customers,  and  have  a  regular  experience 


ii 


214  FARM-MACHINERY  TRADE  ASSOCIATIONS. 

meeting.  The  subject  of  prices  usually  occupies  some  of  the 
time  of  each  meeting,  but  no  iron-claa  agreements  are  made, 
lience  no  penalties  are  needed. 

The  members  say  that  their  coming  together  in  this  friendly 
way  enables  them  to  know  each  other  better  and  gives  them 
greater  confidence  in  each  other,  and  they  find  that  all  are  in 
business  with  the  same  object  in  view,  viz,  for  profit.  They 
are  not  so  suspicious  of  each  other  as  formerly,  do  not  believe 
every  report  they  hear  concerning  the  price  cutting  their  com- 
petitors are  doing. 

•  •  •  •  •  9  • 

There  are  plentv  of  counties  where  similar  clubs  could  be 
started  and  probably  maintained  if  some  one  would  take  the 
initiative.  We  would  like  to  hear  from  our  members  on  the 
subject 

In  October,  1903,  another  editorial  on  the  same  subject  in  the 
Bulletin  made  the  following  comment : 

Some  thhik  that  the  establishment  of  prices  is  the  only  thing 
to  be  gained  by  local  organizations.  We  think  this  is  a  mistake. 
The  price-cutting  evil  will  soon  regulate  itself  after  the  dealers 
become  friendly  and  confidence  is  well  established.  They  will 
suddenly  come  to  the  conclusion  that  they  are  all  in  business 
for  profit,  and  to  succeed  all  must  maintain  about  the  same 
margin  above  the  cost  of  their  goods.  As  adjuncts  to  the  State 
or  interstate  associations  such  organizations  or  clubs  would  be 
invaluable,  and  should  receive  the  encouragement  and  support 
of  every  dealer. 

At  the  annual  meeting  of  the  Federation  in  October,  1903,  plans 
were  perfected  whereby  all  constituent  associations  might  work  in 
close  harmony  in  encouraging  the  formation  of  local  clubs,  In 
November,  1903,  the  Bulletin  announced  that  the  movement  to  form 
local  clubs  was  growing  rapidly.  In  January,  1904,  it  reported  the 
organization  of  a  local  club  by  dealers  in  Crawford  and  Cherokee 
Counties,  Kans.  In  that  month  Local  Club  No.  3  was  formed  by 
dealers  at  Carthage,  Mo.,  its  purpose  being  stated  to  be  that  "of 
perfecting  a  better  system  for  the  extending  of  credits  to  their 
customers  and  for  the  further  purpose  of  presenting  a  solid  front  in 
opposition  to  catalogue  house  business  and  for  the  further  purpose 
of  social  intercourse." 

In  Mferch,  1904,  the  secretary  of  the  Western  association  reported 
that  five  local  clubs  had  been  organized,  and  the  directors  of  the 
lissociation  appointed  a  committee  on  local  clubs.  In  November, 
1904,  the  Federation  adopted  the  following  resolution: 

Believing  that  until  we  can  sustain  more  fraternal  relations 
at  home  among  ourselves  as  competitors,  the  constituent  asso- 
ciations of  the  Federation  can  not  accomplish  their  full  measure 
of  usefulness,  we,  your  committee,  would  urge  a  still  more 
earnest  effort  upon  the  part  of  our  several  official  boards  to  pro- 
mote among  their  memberships  the  formation  of  local  clubs  or 
social  organizations. 


PREVENTION  OF  PRICE  CUTTING  AMONG  DEALERS. 


215 


The  Bulletin  for  January,  1905,  which  had  been  adopted  as  the 
official  organ  of  the  National  Federation,  emphasized  the  necessity  of 
local  clubs  as  a  part  of  the  education  of  dealers  upon  the  subject  of 
the  cost  of  doing  business  and  made  the  following  statements : 

The  profits  in  the  implement  business  are  unsatisfactory. 
m  *****  ^ 

The  price  cutting  policy  is  unbusinesslike  and  ruinous  and 
the  remedy  for  these  adverse  conditions  seems  to  be  organizing 
locally  and  procuring  more  friendly  cooperation. 

In  the  early  part  of  1905  a  committee  of  the  Western  association 
was  appointed  to  prepare  a  uniform  set  of  rules  for  the  guidance  of 
all  "locals"  organized  as  auxiliaries  of  that  association,  and  later 
in  the  year  the  Bulletin  announced  that  "  ready-made  helps "  for 
the  organization  of  local  clubs,  consisting  of  articles  of  association, 
by-laws,  a  form  of  application  for  membership,  and  r.  suggested 
form  of  letter  to  be  used  in  starting  club  work,  had  been  pro- 
vided. In  January,  1907,  the  local-club  movement  was  given  con- 
siderable impetus  at  the  convention  of  the  Western  association.  At 
this  time  notes  regarding  the  proceedings  of  local  clubs  had  become 
a  regular  feature  of  the  Implement  Dealers'  Bulletin.  The  Bulletin 
asserted  that  the  local  club  was  one  of  the  vital  factors  in  the  life 
of  the  general  association  and  of  the  trade  itself.  It  expressed  the 
belief  that  in  the  local  club  lay  the  most  potent  possibilities  for 
overcoming  "  the  evils  of  the  business ; "  that  in  a  local  club  could 
be  settled  all  the  little  personal  differences  and  grievances  and  a 
spirit  of  fairness  and  fraternity  engendered,  which  would  tend  to 
abolish  price  cutting  and  backbiting,  and  enable  dealers  to  unite  in 
plans  to  outwit  the  catalogue  house  "  and  other  prowling  wolves  of 
trade." 

At  the  annual  meeting  of  the  Federation  in  October.  1907,  the  presi- 
dent referred  to  the  progress  that  had  been  made  in  the  organization 
of  local  clubs  as  follows: 

The  organization  of  local  clubs  has  not  been  as  general  as  we 
hoped  for  at  the  beginning  of  the  year.  The  Western  associa- 
tion has  inaugurated  a  vigorous  movement  along  this  line.  There 
has  been  some  progress  in  the  Oklahoma  association,  and  our 
Iowa  association  has  made  a  start.  The  organization  of  local 
clubs  should  be  encouraged  by  every  association.  Lack  of  confi- 
dence and  acquaintance  among  dealers  is  the  principal  cause  for 
local  jealousy  and  misunderstanding,  generally  resulting  in  un- 
pleasant and  unprofitable  conditions.  Let  us  give  this  important 
subject  more  attention. 

He  also  asserted  that — 

On  account  of  the  high-priced  material  and  the  scarcity  of 
labor,  *  *  *  we  will  be  obliged  to  assist  manufacturers  in 
establishing  a  general  advance  in  the  price  of  all  finished  goods 
in  our  line.    As  an  organization  this  Federation  has  never  re- 


21^  FABM-MAGHINERT  TBADE  ASSOCIATIONS. 

garded  with  favor  any  proposition  which  contemplates  a  price 
schedule,  as  such  would  certainly  arouse  the  just  opposition  of 
our  farmer  patrons.  The  same  conditions  govern  our  relations 
with  the  manufacturers.  The  situation  demands  an  advance.  We 
had  notice  a  year  ago  of  this  advance.  In  admitting  the  justice 
and  necessity  for  an  advance  in  prices  we  deplore  conditions 
which  eliminate  free  and  active  competition  between  manu- 
facturers in  any  line,  and  such  combinations  should  meet  with 
the  opposition  of  the  retail  dealer  everywhere. 

In  December  the  Bulletin  referred  to  the  matter  of  advancing 
prices  in  an  article  which  read  as  follows : 

With  the  steadily  advancing  prices  of  all  goods  in  the  imple- 
ment, vehicle  and  hardware  lines  has  come  a  very  perceptible 
reduction  in  the  profits  to  the  retailer.  A  majority  have  been 
timid  about  advancing  the  retail  prices  as  the  increased  costs 
seemed  to  justify. 

Again,  too  many  dealers  fail  to  take  into  account  the  expense 
of  marketing  their  goods  when  deciding  upon  their  selling  price. 
In  a  majority  of  cases  the  invoice  price  and  transportation 
.    charges  are  about  all  that  are  considered  when  figuring  costs. 

This  is  the  time  of  the  year  for  taking  the  annual  inventory 
and  figuring  up  the  year's  business,  and  it  will  be  an  easy  matter 
to  ascertain  what  the  percentage  of  expense  has  been  for  con- 
ducting the  business  the  past  year,  and  when  arranging  a  schedule 
of  prices  for  the  coming  season  this  should  be  added  to  the  cost 
and  carriage  and  the  percentage  of  profit  added  to  that. 

It  will  be  found  that  a  thorough  knowledge  of  what  it  costs 
to  sell  goods  will  have  a  stimulating  effect  in  maintaining  prices, 
and  no  dealer  has  his  business  well  in  hand  who  does  not  possess 
this  knowledge. 

This  important  subject  will  be  discussed  at  the  convention,  and 
no  matter  how  long  you  have  been  in  the  business  or  how  well 
satisfied  you  are  with  your  present  methods,  you  will  pick  up 
some  pointers  that  are  of  value  to  you. 

The  necessity  for  increased  prices  because  of  increased  cost  of 
materials  had  already  been  referred  to  by  the  chairman  of  the 
executive  committee  of  the  National  Association  of  Agricultural 
Implement  &  Vehicle  Manufacturers  at  a  conference  in  January,  1907, 
between  representatives  of  that  association  and  of  the  Western  asso- 
ciation. In  his  explanation  the  chairman  admonished  the  dealers,  as 
follows : 

Locally  you  should  have  an  understanding  among  yourselves 
as  to  what  is  a  fair  price,  and  stick  to  it.  Your  local  orgahiza- 
tion  is  to  be  your  salvation. 

The  advantages  of  local  clubs  were  pointed  out  in  a  letter  from  the 
chairman  of  the  Federation's  committee  on  local  clubs  published  in 
the  Bulletin  for  November,  1908.    This  letter  read  in  part  as  follows: 

We  have  our  State  or  district  associations  to  work  for  the  bet- 
terment of  conditions  and  protect  the  interests  of  the  dealers  in 


PBEVENTION   OF  PRICE  CUTTING  AMONG  DEALERS. 


217 


their  territory  and  protect  their  members,  through  their  legisla- 
tive, insurance  and  complaint  committees. 

We  have  our  National  Federation  to  help  the  State  and  district 
associations,  meet  the  various  national  manufacturers'  associa- 
tions, and  look  after  the  matters  of  national  importance. 

But  in  order  to  make  the  work  of  the  National  Federation  and 

the  State  associations  of  the  greatest  benefit  to  the  individual 

firms  we  should  have  the  local  associations,  for  the  improvement 

of  the  whole  must  come  from  the  improvement  of  the  individuals. 

♦  *♦♦♦** 

The  question  of  territory  to  be  covered  by  a  local  association  is 
important.  It  should  be  the  territory  surrounding  a  central,  or 
easily  and  cheaply  accessible  town,  such  as  most  county  seats. 

A  local  association  can  organize  with  officers  and  committees 
on  complaints,  credits,  catalogue  house,  collections,  exchange, 
legal  mattei-s,  and  auxiliary  to  the  State  or  district  association. 
Make  annual  dues  low  as  possible.  Adopt  uniform  blank  orders 
and  notes,  uniform  terms  for  sales  and  settlements,  cut  out  trad- 
ing for  old  goods,  canvassing,  and  delivering  goods,  secure  list 
of  catalogue  house  patrons,  make  lists  of  slow  and  dead-beat 
customers,  protect  against  auctions  and  peddlers,  save  expense 
in  legal  matters,  make  progress,  profit  and  protection. 

Will  you  work  or  be  worked? 

A  letter  on  the  same  subject  from  a  member  of  the  Western  asiso- 
«nation,  published  in  the  Bulletin  in  July,  1908,  read  in  part  as  fol- 
lows : 

I  am  frank  to  say  that  we  can  never  hope  to  get  all  our  neigh- 
bor dealers  to  join  our  local  clubs.     *     *     * 

Those  who  hesitate  to  join  local  clubs  on  account  of  a  feel- 
ing that  they  are  combinations  that  fix  and  raise  prices  can 
disabuse  their  minds  of  any  such  idea,  as  there  are  so  many 
more  important  things  than  the  matter  of  retail  price,  things 
that  are  sapping  our  very  business  life  every  day,  that  there 
is  no  time  for  such  foolishness  as  talking  about  fixing  retail 
prices. 
The  secretary  of  the  Federation  asserted  in  1912  that  the  mainte- 
nance of  a  price  schedule,  by  a  local  club  of  dealers,  is  neither  prac- 
ticable nor  possible.    In  this  connection,  he  said : 

There  are  but  few,  if  any,  local  clubs  that  include  jn  their 
membership  all  of  the  competitors  in  any  locality,  hence  the 
impossibility  of  having  any  price  agreement. 

No  evidence  is  available  to  show  whether  the  members  of  any  of 
the  local  clubs  organized  as  auxiliaries  of  the  federated  associations 
during  this  period  made  any  effective  agreements  as  to  uniform 
prices.  The  formation  of  such  clubs  by  bringing  together  dealers 
in  active  competition  with  each  other  in  various  localities  must  have 
had  more  or  less  of  a  tendency  to  influence  retail  prices  and  must 
have  offered  some  temptation  to  make  price  agreements,  iilthough  the 


218 


FARM-MACHINERY  TRADE  ASSOCIATIONS, 


PREVENTION   OF   PRICE   CUTTING  AMONG  DEALERS. 


219 


Federation  and  its  constituent  associations  did  not  encourage  such 
activity  among  members  of  local  clubs.  As  shown  abovv,  the  Bulle- 
tin took  the  position  that  the  practice  of  price  cutting  would  regulate 
itself  as  dealers  became  more  friendly  and  confidence  established. 
In  connection  with  the  cost  educational  campaign  discussed  in  the 
following  section,  frequent  reference  is  made  to  subsequent  activities 
in  the  promotion  of  local  clubs  by  the  manufacturers'  and  dealers' 
associations. 

Section  S.  Priees  based  on  nniform  method  of  compnting  costs. 

The  unsatisfactory  condition  of  the  retail  trade  in  farm  wagons 
in  1906  resulted,  in  November  of  that  year,  in  the  determination  by  '■ 
the  National  Wagon  Manufacturers'  Association  to  investigate  terms 
with  a  view  to  bettering  the  general  conditions.  The  Kansas  City 
implement  jobbers'  club  had  already  started  an  educational  campaign 
among  the  dealers  in  behalf  of  higher  retail  prices  and  shorter  terms. 
The  undertaking  of  the  wagon  manufacturers  eventually  resolved 
itself  into  an  organized  movement  to  secure  the  maintenance  of  better 
retail  prices  by  educating  dealers  in  their  costs  of  doing  business, 
according  to  a  plan  of  cost  accounting  advocated  by  the  Ct»st  Edu- 
cationml  Association.    (See  p.  228.) 

In  starting  this  movement  in  a  systematic  way  the  secretary  of 
the  National  Wagon  Manufacturers'  Association,  in  November, 
1908,  addressed  a  letter  to  the  principal  journals  devoted  to  the 
interests  of  the  retail  implement  and  vehicle  dealers.  This  letter, 
which  was  not  intended  for  publication,  explained  the  conditions  as 
viewed  by  the  writer  and  asked  a  statement  of  opinions  from  the 
several  editors  in  regard  to  starting  a  campaign  of  education.  This 
was  followed  shortly  afterwards  by  a  bulletin  issued  to  the  members 
of  the  wagon  association  on  the  subject  of  "Educating  your  cus- 
tomera  and  its  bearing  on  the  trade."  In  this  bulletin  the  secretary 
explained  the  influence  of  prices  made  by  inexperienced  dealers  on 
trade  conditions.    This  bulletin  read  in  part  as  follows: 

Reliable  information  shows  that  out  of  every  hundred  dealers 
20  to  40  fatly  sell  out,  or  give  up  this  line  each  year,  mainly  be- 
caujse  it  has  not  paid.  Why?  Principally  because  the  greater 
number  entering  this  line  come  from  the  farm  with  a  knowledge 
of  the  use  of  what  they  sell  but  little  or  no  business  education 
to  help  them  to  success,  so  that  when  the  wagon  and  implement 
salesmen  load  them  up  and  leave  them  to  their  own  devices, 
without  a  word  of  instruction  or  suggestion,  it  is  not  strange 
that  they  commit  the  error  of  adding  only  a  dollar  or  two  above 
the  factory  cost  and  freight  and  calling  it  profit.  Then,  when 
the  season^s  business  shows  little  or  no  profit,  they  change  their 
lines,  seeking  lower  prices,  until  the  sheriff  gets  them  or  they  sell 
out  to  some  other  unfortunate.    This  class  of  dealer  is  the  kind 


.A] 


nr  i) 


the  good  dealer  is  always  complaining  of  and  the  kind  that 
causes  him  to  drop  the  handling  of  wagons.  Well,  what  are  you 
going  to  do  about  it? 

This  is  a  statement  and  question  I  have  just  put  up  to  the  most 
prominent  plow  and  implement  manufacturers  and  jobbers, 
dealers'  associations  and  trade  papers,  throughout  the  country, 
together  with  the  following  suggestions: 

1.  Start  simultaneously  an  educational  campaign  and  stick 
to  it. 

2.  Let  manufacturers  and  jobbers  make  an  effort  through  their 
selling  and  advertising  forces. 

3.  Trade  journals  to  cooperate  in  able  editorials  and  telling 
illustrations  in  cost  and  profit  figuring. 

4.  Dealers'  organizations,  by  making  ^^cost-expense  and 
profit "  the  most  prominent  subject  at  their  conventions  and 
the  appointment  of  a  standing  committee,  who,  with  the  secre- 
tary, will  send  information  monthly  to  their  members. 

6.  Personal  effort  on  the  part  of  the  traveling  salesmen  to 
urge  the  dealer  to  retail  the  goods  he  sells  them  at  more  profit- 
able prices. 

The  answers  have  been  coming  in  every  day,  and  the  largest 
majority  say  the  idea  is  right  and  they  will  help — only  a  few 
say  it  might  succeed  but  they  are  doubtful,  still  suggest  no  other 
remedy  for  this  serious  situation. 

»♦♦♦♦•* 

The  trade  journals  are  ready  and  willing  to  cooperate,  glad 
to.  The  dealers'  associations,  though  blaming  the  manufac- 
turers and  jobbers  for  many  of  their  ills,  say  they  will  gladly 
cooperate,  and  have  already  given  the  question  a  prominent  part 
in  their  convention  programs  and  we  have  supplied  the  speakers 
with  much  effective  data — also  the  manufacturers  who  will  speak 
to  them  at  conventions  of  the  Illinois,  Wisconsin,  and  Iowa  asso- 
ciations, one  of  whom  is  our  executive  chairman,  Mr.  Kinney, 
who  will  put  the  matter  to  them  strongly;  we  will  urge  the  later 
conventions  in  like  manner. 

Don't  you  see  that  if  we  can  educate  our  trade  how  to  figure 
complete  costs,  as  we  ourselves  have  learned  and  benefited  by  it, 
then  they  will  know  the  danger  line  separating  cost  from  profit — 
few  throw  away  profit  knowingly,  but  many  do  so  ignorantly. 

I  inclose  a  little  illustration  entitled  "  Figuring  costs  "  which 
is  worth  while  noting:  See  how  a  margin  that  looks  large  dwin- 
dles down  to  insufficient  profit  when  actual  cost  and  expense  is 

•deducted. 

If  the  annual  expense  of  the  dealer  is  10, 15,  or  20  per  cent  of 
his  selling  price,  where  does  he  get  off  in  selling  two-horse  wagons 
at  $5  more  than  factory  price  and  freight?  And  are  we  wise 
in  letting  the  dealer  drift  along  until  he  finds  this  out  and  drops 
wagons,  or  will  it  not  be  better  to  back  him  up  in  getting  prices 
that  will  make  the  business  profitable  and  interesting  and  so 
help  ourselves? 

If  we  take  up  this  campaign,  with  the  cooperation  of  the  other 
lines  I  have  mentioned,  it  will  mean  a  long,  persistent  fight,  and 
no  one  should  enlist  "  to  give  it  a  trial,"  for  it  is  either  right  or 


220  FABM-MACHINERY  TRADE  ASSOCIATIONS. 

wrong,  and  if  right,  means  the  preservation  of  our  business,  but 
will  take  time  and  energy. 

I  desire  very  much  jrour  opinion  of  the  matter  before  our 
meeting  next  week,  for  m  event  of  a  majority  favoring  the  plan, 
we  want  to  line  up  the  other  associations  and  get  the  movement 
started  to  affect  1909  trade  as  early  as  possible. 

This  subject  assumed  greater  importance  by  reason  of  the  advance 
of  10  per  cent  in  prices  decided  upon  by  the  wagon  association  at 
that  time.  (See  p.  371.)  The  manufacturers  appear  to  have  realized 
that  it  would  be  diificult  to  maintain  this  advance  unless  the  dealers 
were  awakened  to  the  importance  of  making  a  similar  advance  in 
i-etail  prices.  At  a  meeting  of  the  wagon  association  the  secretary 
reported  that  various  branches  of  the  trade  were  developing  great 
intei-est  in  the  subject  of  a  general  inquiry  into  costs  of  doing  busi- 
ness, especially  as  it  affected  the  inexperienced  dealers,  and  on  recom- 
mendation of  the  secretary  it  was  voted  "  that  we  recommend  that 
all  members  of  the  association  become  interested  and  cooperate 
earnestly  and  effectively  along  the  lines  suggested,  and  those  that 
may  be  shown  in  working  out  a  practical  plan,  and  that  we  will 
unite  with  other  industrial  associations  furnishing  goods  that  go  to 
the  farmers  through  the  dealer  in  doing  everything  we  reasonably 
can  to  urge  upon  the  dealer  the  necessity  of  cost  knowledge  and  sup- 
porting him  in  obtaining  better  returns  on  his  sales  to  the  consumer." 

During  the  convention  of  the  Western  association  at  Kansas  City 
in  January,  1909,  a  very  important  conference  was  held  by  repre- 
sentatives of  the  dealers,  manufacturers,  jobbers,  and  trade  papers, 
to  consider  the  cost  educational  work  as  a  remedy  for  the  reduced 
profits  in  the  sale  of  implements  and  vehicles.  A  committee  on  per- 
manent organization  *  was  appointed  and  it  was  ''  recommended  that 
the  matter  of  permanent  organization  be  referred  to  the  president 
and  secretary  of  the  several  implement  and  vehicle  manufacturers 
associations,  the  National  Federation  and  to  delegates  from  each 
of  the  implement  and  vehicle  clubs  of  the  large  implement  trade 
centers." 

»  Tbis  committee  as  appointed  was  to  l>e  made  up  of  the  president  and  the  secretary  of 
the  following  associations  :  National  Wagon  Manufacturers'  Association,  Carriage  Munu- 
facti:rer%'  Association  of  America,  Carriage  Builders'  National  Association,  National  Plow 
Association,  National  Association  of  Agricultural  Implement  &  Vehicle  Manufacturers. 
National  Federation  of  Retail  Implement  &  Vehicle  Dealers'  Associations;  also  two  dolo- 
gates  from  each  of  the  Implement  and  vehicle  clubs  of  Jobbers  at  Kansas  City,  St.  Louis, 
Minneapolis.  Dallas,  Omaha,  Oklahoma  City.  Dea  Moines,  and  Peoria ;  also  the  Implement 
trade  ioumals  by  accredited  representatives.  The  secretary  of  the  National  Wagon  Manu- 
facturers' Association  was  elected  chairman. 

The  duties  of  this  special  committee  were  to  Investigate  the  existing  conditions  and  to 
report  the  result,  with  their  recommendations  of  possible  remedies,  to  a  Joint  meeting  of 
the  committee  and  the  National  Federation  of  Retail  Implemont  &  Vehicle  Dealers'  Asso- 
ciations, at  the  time  of  the  tatter's  annual  meeting  in  the  fall.  The  report  was  particu- 
larly to  inciude  suggestions  as  to  the  advisability  of  effecting  a  permanent  organization  to 
carrj  out  all  recommendations  finally  made  and  adopted. 


PREVENTION   OF   PRICE  CUTTING  AMONG  DEALERS. 


221 


r 


#1^ 


During  January,  1909,  the  secretary  of  the  wagon  manufacturers' 
association  addressed  conventions  of  dealers'  associations  at  Minne- 
apolis and  Kansas  City  on  the  subject  of  costs.  The  same  month 
another  representative  of  the  association  addressed  a  meeting  of 
dealers  at  Portland,  Oreg.  In  connection  with  these  addresses,  the 
secretary,  in  a  bulletin  dated  January  29,  stated : 

You  have  already  learned  from  the  convention  reports  pub- 
lished in  the  trade  journals  how  this  movement  among  manu- 
facturers, jobbers  and  dealers'  organizations  has  taken  hold 
all  over  the  country,  and  that  a  conference  will  be  held  at  Chi- 
cago to  effect  a  permanent  organization  along  these  lines  in  the 
near  future. 

It  simply  means  that  we  must  take  a  hand  in  the  education 
of  our  trade  if  we  would  have  them  realize  the  increased  cost 
of  our  product  and  at  the  same  time  realize  that  their  prices 
must  also  be  advanced  to  maintain  their  profits. 

In  February,  1909,  the  secretary  sent  a  letter  to  secretaries  of 
various  dealers'  associations,  inclosing  blank  for  the  purpose  of 
gathering  data  to  be  used  in  the  preparation  of  a  cost-finding  sys- 
tem, and  in  March  he  issued  a  bulletin  to  members  of  the  wagon 
association,  stating  that  the  inquiry  had  disclosed  a  lack  of  infor- 
mation among  retailers  in  the  matter  of  their  costs  and  that  most  of 
the  figures  that  had  been  submitted  were  marked  "  estimtited."  In 
this  bulletin  he  also  said  in  part : 

Would  it  not  be  worth  while  at  this  time,  when  your  cus- 
tomers may  be  fighting  your  May  1  advance,  or  tryinji  to  beat 
down  your  prices  (which  seems  to  be  the  only  way  they  can 
think  of  to  make  money),  that  you  instruct  your  travelers  to 
learn  what  your  wagons  are  retailed  at,  and  show  them  how  to 
make  money  on  them  if  they  are  not  doing  so — you  can  also  do 
much  from  your  office  along  these  lines,  in  fact,  as  this  matter 
of  cost  knowledge  is  necessary  in  all  lines  handled,  your  efforts 
to  aid  your  trade  this  way  will  promote  better  acquaintance, 
and  when  your  customer  is  convinced  he  is  making  money  on 
your  line  he  will  not  readily  yield  to  your  competitors. 

Recently,  a  jobber  in  selling  a  certain  wagon  insisted  on 
knowing  the  price  at  which  the  dealer  would  retail  it,  and  re- 
fused to  give  territory  and  the  agency  of  the  wagon  to  anyone 
whose  retail  price  would  not  yield  him  a  good  profit.  The  job- 
ber stated  to  me  that  he  had  found  enough  dealers  attracted 
by  this  practical  guarantee  of  a  good  profit  to  give  him  a  very 
satisfactory  trade.  His  plan  is  entirely  legal,  and  you  could 
not  take  his  customers,  as  they  are  more  interested  in  the  profit 
they  get  than  the  price  they  pay  for  the  wagon.  I  am  firmly 
convinced  that  this  plan  is  practical  and  can  be  followed  suc- 
cessfully with  any  wagon  of  good  standing  and  merit  if  placed 
in  intelligent  hands  and  a  sufficient  amount  of  territory  given. 


u 


\ 


220  FARM-MACHINEBY  TBADE  ASSOCIATIONS. 

wrong,  and  if  right,  means  the  preservation  of  our  business,  but 
will  take  time  and  energy. 

I  desire  very  much  jrour  opinion  of  the  matter  before  our 
meeting  next  week,  for  in  event  of  a  majority  favoring  the  plan, 
we  want  to  line  up  the  other  associations  and  get  the  movement 
started  to  affect  1909  trade  as  early  as  possible. 

This  subject  assumed  greater  importance  by  reason  of  the  advance 
of  10  per  cent  in  prices  decided  upon  by  the  wagon  association  at 
that  time.  (See  p.  371.)  The  manufacturers  appear  to  have  realized 
that  it  would  be  diiiicult  to  maintain  this  advance  unless  the  dealers 
were  awakened  to  the  importance  of  making  a  similar  advance  in 
i"etail  prices.  At  a  meeting  of  the  wagon  association  the  secretary 
reported  that  various  branches  of  the  trade  were  developing  great 
interest  in  the  subject  of  a  general  inquiry  into  costs  of  doing  busi- 
ness, especially  as  it  affected  the  inexperienced  dealers,  and  on  recom- 
mendation of  the  secretary  it  was  voted  "  that  we  recommend  that 
all  members  of  the  association  become  interested  and  cooperate 
earnestly  and  effectively  along  the  lines  suggested,  and  those  that 
may  be  shown  in  working  out  a  practical  plan,  and  that  we  will 
unite  with  other  industrial  associations  furnishing  goods  that  go  to 
the  farmers  through  the  dealer  in  doing  everything  we  reasonably 
can  to  urge  upon  the  dealer  the  necessity  of  cost  knowledge  and  sup- 
porting him  in  obtaining  better  returns  on  his  sales  to  the  consumer." 

During  the  convention  of  the  Western  association  at  Kansas  City 
in  January,  1909,  a  very  important  conference  was  held  by  repre- 
sentatives of  the  dealers,  manufacturers,  jobbers,  and  trade  papers, 
to  consider  the  cost  educational  work  as  a  remedy  for  the  reduced 
profits  in  the  sale  of  implements  and  vehicles.  A  committee  on  per- 
manent organization  ^  was  appointed  and  it  was  '"  recommended  that 
the  matter  of  permanent  organization  be  referred  to  the  president 
and  secretary  of  the  several  implement  and  vehicle  manufacturers 
associations,  the  National  Federation  and  to  delegates  from  each 
of  the  implement  and  vehicle  clubs  of  the  large  implement  trade 
centers." 

*  This  committee  as  appointed  was  to  be  made  up  of  the  president  and  the  secretary  of 
the  following  associations :  National  Wagon  Manufacturers'  Association,  Carriage  Manu- 
facturers' Association  of  America,  Carriage  Builders'  National  Association,  National  IMow 
Assoclaflon,  National  Association  of  Agricultural  Implement  &  Vehicle  Manufacturers. 
National  Federation  of  Retail  Implement  &  Vehicle  Dealers'  Associations;  also  two  dele- 
gates from  each  of  the  Implement  and  vehicle  clubs  of  Jobbers  at  Kansas  City,  St.  I^uis, 
Minneapolis,  Dallas,  Omaha,  Oklahoma  City,  Des  Moines,  and  Peoria ;  also  the  Implement 
trade  Jonmals  by  accredited  representatives.  The  secretary  of  the  National  Wagon  Manu- 
facturers' Association  was  elected  chairman. 

The  duties  of  this  special  committee  were  to  investigate  the  existing  conditions  and  to 
report  the  result,  with  their  recommendations  of  possible  remedies,  to  a  Joint  meeting  of 
the  committee  and  the  National  Federation  of  Retail  Implcmont  &  Vehicle  Dealers'  Asso- 
ciations, at  the  time  of  the  latter's  annual  meeting  in  the  fall.  The  report  was  particu- 
larly to  Include  suggestions  as  to  the  advisability  of  effecting  a  permanent  organization  to 
carry  out  all  recommendations  finally  made  and  adopted. 


PBEVENTION   OF  PRICE  CUTTING  AMONG  DEALERS. 


221 


« 


4 


During  January,  1909,  the  secretary  of  the  wagon  manufacturers' 
association  addressed  conventions  of  dealers'  associations  at  Minne- 
apolis and  Kansas  City  on  the  subject  of  costs.  The  same  month 
another  representative  of  the  association  addressed  a  meeting  of 
dealers  at  Portland,  Oreg.  In  connection  with  these  addresses,  the 
secretary,  in  a  bulletin  dated  January  29,  stated : 

You  have  already  learned  from  the  convention  reports  pub- 
lished in  the  trade  journals  how  this  movement  among  manu- 
facturers, jobbers  and  dealers'  organizations  has  taken  hold 
all  over  the  country,  and  that  a  conference  will  be  held  at  Chi- 
cago to  effect  a  permanent  organization  along  these  lines  in  the 

near  future.  ,  •      i        i       i.- 

It  simply  means  that  we  must  take  a  hand  m  the  education 
of  our  trade  if  we  would  have  them  realize  the  increased  cost 
of  our  product  and  at  the  same  time  realize  that  their  prices 
must  also  be  advanced  to  maintain  their  profits. 

In  February,  1909,  the  secretary  sent  a  letter  to  secretaries  of 
various  dealers'  associations,  inclosing  blank  for  the  purpose  of 
gathering  data  to  be  used  in  the  preparation  of  a  cost-finding  sys- 
tem, and  in  March  he  issued  a  bulletin  to  members  of  the  wagon 
association,  stating  that  the  inquiry  had  disclosed  a  lack  of  infor- 
mation among  retailers  in  the  matter  of  their  costs  and  that  most  of 
the  figures  that  had  been  submitted  were  marked  "  estimated."  In 
this  bulletin  he  also  said  in  part : 

Would  it  not  be  worth  while  at  this  time,  when  your  cus- 
tomers may  be  fighting  your  May  1  advance,  or  trying;  to  beat 
down  your  prices  (which  seems  to  be  the  only  way  they  can 
think  of  to  make  money),  that  you  instruct  your  travelers  to 
learn  what  your  wagons  are  retailed  at,  and  show  them  how  to 
make  money  on  them  if  they  are  not  doing  so— you  can  also  do 
much  from  your  office  along  these  lines,  in  fact,  as  this  matter 
of  cost  knowledge  is  necessary  in  all  lines  handled,  your  efforts 
to  aid  your  trade  this  way  will  promote  better  acquaintance, 
and  when  your  customer  is  convinced  he  is  making  money  on 
your  line  he  will  not  readily  yield  to  your  competitors. 

Recently,  a  jobber  in  selling  a  certain  wagon  insisted  on 
knowing  the  price  at  which  the  dealer  would  retail  it,  and  re- 
fused to  give  territory  and  the  agency  of  the  wagon  to  anyone 
whose  retail  price  would  not  yield  him  a  good  profit.  The  job- 
ber stated  to  me  that  he  had  found  enough  dealers  attracted 
by  this  practical  guarantee  of  a  good  profit  to  give  him  a  very 
satisfactory  trade.  His  plan  is  entirely  legal,  and  you  could 
not  take  his  customers,  as  they  are  more  interested  m  the  vrofit 
they  get  than  the  price  they  pay  for  the  wagon.  I  am  firmly 
convinced  that  this  plan  is  practical  and  can  be  followed  suc- 
cessfully with  any  wagon  of  good  standing  and  merit  if  placed 
in  intelligent  hands  and  a  sufficient  amount  of  territory  given. 


j2aiSS 


7ARM-MAGHINEBT  TBADE  ASSOCIATIONS. 


PBEVENTION   OP  PBICE  CUTTING  AMONG  DEALERS. 


223 


i 


Later  in  March,  1909,  another  bulletin  was  issued  to  the  members 
of  the  wagon  association,  inclosing  a  form  of  letter  which  it  was  sug- 
gested might  be  sent  out  to  the  trade  in  helping  along  the  campaign 
of  cost  education.    This  bulletin  said  in  part : 

It  is  our  aim,  if  these  suggestions  meet  approval,  to  follow 
them  later  with  more  direct  facts  and  figures,  so  as  to  convince 
the  dealer  that  attention  to  this  matter  by  him  means  real  money 
profit. 

The  form  letter  inclosed  with  this  bulletin  read  as  follows : 

Subject :  "  Better  profits,^ 

Gentlemen  :  Are  the  profits  you  are  making  on  the  lines  you 
are  handling  satisfactory,  especially  our  make  of  wagons?    If 
not,  won't  you  tell  us  where  the  trouble  is,  for  we  believe  that  to- , 
gether  we  can  find  a  remedy. 

Success  or  failure. — All  who  engage  in  business  do  so  to  make 
money,  yet  it  is  said  90  per  cent  fail  to  succeed — why  ? — and  are 
you  and  we  to  be  counted  with  the  10  per  cent  of  successes  or 
the  90  per  cent  of  failures?    That  depends  largely  on  ourselves. 

The  principal  causes  given  for  business  failures  are — inexperi- 
ence— lack  of  capital — lack  of  knowledge  as  to  the  cost  of  doing 
business — the  last  being  the  most  important  of  all. 

When  we  engage  in  business  and  invest  our  capital,  we  aim  to 
do  three  things ;  first,  to  pay  all  expenses ;  second,  to  provide  for 
the  living  expenses  of  ourselves  and  families ;  third,  to  make  a 
clear  gain  on  our  investment  after  providing  for  these  expenses, 
otherwise  we  would  better  loan  our  capital  and  work  on  a  salary 
for  someone  else. 

Expense. — ^The  great  stumbling  block  seems  to  be  that  we  do 
not  get  enough  profit.  Why?  Because  we  do  not  know  when 
we  are  asking  a  right  measure  of  profit  imless  we  have  added 
the  proper  proportion  of  every  item  of  expense  to  the  invoice 
price  and  freight  paid  for  each  item  to  determine  its  total  cost 
before  adding  profit.  You  may  guess  or  estimate  your  expenses 
in  fixing  your  selling  prices,  but  bear  in  mind  that  when  expense 
deals  with  your  cash  drawer  it  .demands  full  payment — not  $4 
for  $5  but  500  cents  taken  right  out  of  your  investment  or 
profits.  Do  we  realize  that  "Expense"  is  the  greatest  foe  to 
business  success,  and  must  be  known  and  controlled  or  failure 
must  eventually  follow? 

The  following  are  some  of  the  items  that  we  should  keep 
account  of  daily,  no  matter  how  small  the  amount  is  we  pay  out 
for  them — then  there  will  be  a  number  of  special  expenses  pecul- 
iar to  your  particular  business,  viz,  interest  on  'all  capital  in- 
vested (including  borrowed  money) ;  rent  (if  the  owner,  what 
the  property  would  rent  for  should  be  charged) ;  salaries  (wages 
of  all  help  including  members  of  firm) ;  express,  telephone  and 
telegraph  (not  charged  to  customers);  advertising;  stationery, 
office  supplies,  postage  and  envelopes;  dray  age  (goods  received 
and  goods  delivered) ;  fuel  and  lights;  livery,  horse  feed,  shoe- 
ing and  wagon  repairs;  insurance  and  taxes;  traveling  expenses; 
store  supplies  and  repairs;  donations  and  subscriptions;  losses 
on  bad  accounts  and  notes;  attorney's  fees  and  costs  for  collect- 


^ 


4 


«  1 


ing;  depreciation  on  stock  carried  over;  deductions  and  allow- 
ances to  customers ;  all  other  expenses. 

Salesmanship. — If  you  have  not  been  applying  the  amount  of 
your  expenses  before  adding  your  profit,  you  will  find  a  read- 
justment of  many  of  your  selling  prices  necessary — raising  some 
and  perhaps  lowering  others — but  it  is  the  only  safe  way  to  run 
a  business  and  meet  real  competition. 

Competition  is  too  intense  to  permit  of  anything  but  fair 
profits,  and  these  both  you  and  the  manufacturer  must  have  to 
keep  out  of  the  ranks  of  business  failures. 

True  salesmanship  is  selling  goods  at  a  profit,  not  price  match- 
ing, that  is  often  called  "meeting  competition,"  for  it  requires 
no  brains  or  skill  to  give  away  good  goods  at  the  same  price  as 
one's  competitor  is  offering  an  inferior  line.  Meeting  competi- 
*'  tion,  in  fact,  is  to  know  the  superior  merits  of  the  goods  you  are 
handling  and  so  impress  them  upon  your  customer  that  he  will 
decide  he  wants  them,  just  as  you  wanted  them  when  the  travel- 
ing salesman  for  the  manufacturer  convinced  you  of  their 
merits.  Price  plays  only  a  minor  part  with  a  good  salesman  or 
merchant — few  goods  are  worth  more  than  what  they  are 
sold  for. 

If  you  have  a  competitor  who  is  making  a  ruinous  price  on 
good  goods,  nine  chances  out  of  ten  he  is  doing  it  ignorantly,  and 
it  will  be  money  in  your  pocket  to  visit  and  show  him  your  costs 
and  his  error ;  but  if  you  can  not  convince  him,  the  more  loss  he 
makes  the  sooner  he  will  go  out  of  business — ^you  can  better 
afford  to  wait  than  go  down  with  him,  for  his  trade  will  leave 
him  when  they  can  not  get  goods  at  cut  prices. 

Wagon  costs. — ^Lastly,  as  to  wagons,  which  are  an  indispens- 
able necessity  but  have  fore  several  years  past  been  sold  at  a  very 
small  profit,  you  can  not  give  too  close  attention  to  your  costs, 
profits,  and  readjustment  of  selling  prices  on  them,  for  neces- 
sary advances  must  be  made  from  time  to  time  to  meet  the  in- 
creasing cost  of  production,  principally  due  to  the  growing  short- 
age of  wood  materials,  and  the  future  holds  no  promise  of  lower 

costs. 

Trusting  that  something  that  we  have  said  from  our  experi- 
ence may  help  you,  and  assuring  you  of  our  willingness  to  assist 
you  in  the  increasing  of  your  wagon  trade  to  our  mutual  good, 
we  remain 

Yours  truly. 

Under  date  of  April  9,  1909,  another  bulletin  was  issued  to  mem- 
•  bers  of  the  wagon  association,  calling  attention  to  resolutions  passed 
by  the  Empire  State  Implement  Men's  Club  indorsing  the  movement 
to  educate  the  implement  and  machine  dealer  in  his  costs  of  doing 
business  and  declaring  that  travelers  should  educate  dealers  to  get 
better  prices  and  more  reasonable  profits  and,  further,  that  travelers 
when  canvassing  with  dealers  should  absolutely  insist  upon  the  deal- 
ers getting  the  regular  retail  price  on  every  sale.  In  connection  with 
these  resolutions,  the  secretary  of  the  wagon  association  stated: 

We  educate  our  employees  in  every  department  of  service  to 
get  the  best  results ;  why  should  we  not  counsel  with  our  travel- 


224 


FABM-MAGHINEBY  TBADE  ASSOCIATIONS. 


f 


L 


ers,  and  get  their  cooperation  on  such  an  important  matter  as 
this,  for  we  know  that  it  costs  far  less  to  hold  old  trade  than  to 
make  new.  A  real  salesman  will  be  quick  to  see  the  value  of  this 
work,  but  one  of  the  "  What's  the  use  "  kind  will  continue  to  be 
a  human  expense  account. 

The  secretary  continued  to  correspond  with  the  secretaries  of  deal- 
ers' associations  and  with  the  trade  journals  on  the  subject  of  cost 
education,  and,  under  date  of  October  7, 1909,  a  call  was  issued  for  a 
meeting  at  Kansas  City  of  the  special  committee  on  costs  appointed 
in  January,  1909.  (See  p.  220.)  This  committee  met  October  21,  the 
secretary  of  the  National  Wagon  Manufacturers'  Association  acting 
as  chairman,  and  rendered  a  report  to  the  National  Federation  of  Re- 
tail Implement  &  Vehicle  Dealers'  Associations  then  in  session.  This 
report  showed  considerable  variation  in  the  costs  of  different  dealers 
in  different  parts  of  the  country  from  whom  figures  had  been  ob- 
tained. It  also  embodied  suggestions  as  to  the  items  that  should  be 
included  in  computing  costs.  The  dealers'  Federation  indorsed  these 
suggestions  and  ordered  a  supply  of  them  printed  auvl  sent  to  all 
constituent  associations,  with  the  request  that  a  copy  of  them  be 
placed  in  the  hands  of  every  member.  (See  p.  229.)  It  was  stated  by 
the  secretary  of  the  wagon  manufacturers'  association  that — 

We  expect  to  again  meet  with  the  Federation  in  January,  at 
which  time  it  is  hoped  plans  can  be  formulated  to  place  this  cost 
effort  on  a  practical  and  permanent  basis,  as  the  lack  of  cost 
knowledge  is  at  the  bottom  of  nearly  all  business  trouble. 

The  dealers  expect  cooperation  from  the  manufacturers  and 
jobbers  in  working  out  this  problem,  and  we  would  suggest  that 
you  look  over  the  above  cost  recommendations  and  if  you  are  as 
impressed  with  their  practicality  as  the  dealers  are,  have  a  quan- 
tity of  them  printed  m  card  or  circular  form  and  send  them  out 
to  your  customers  by  mail,  also  let  your  travelers  call  attention 
to  them.    Better  grade  merchants  mean  better  grade  customers. 

At  the  annual  meeting  of  the  wagon  association  in  November, 
1909,  the  secretary  made  a  report  of  the  progress  of  the  cost  educa- 
tional movement,  and  the  members  adopted  the  following  recom- 
mendation: 

That  the  important  parts  of  this  report  and  suggestions  be 
printed  and  furnished  members  at  cost  for  distribution  to  their 
trade  and  that  fullest  cooperation  be  given  in  urging  the  im- 
portance of  the  matter  on  one's  customei-s. 

Referring  to  the  influence  of  the  cost  educational  movement  in 
bettering  conditions  in  the  wagon  trade,  the  secretary  of  the  wagon 
association,  in  a  bulletin  issued  December  20,  1909,  said  in  part : 

The  wagon  business  fell  from  being  one  of  the  most  profitable 
lines  handled  by  the  dealer  to  one  of  very  little  profit  by  a  com- 
bination of  circumstances,  which  we  discovered  after  the  effect 


r 


PREVENTION    OF  PEICE  CUTTING  AMONG  DEALERS. 


225 


i) 


# 


had  reached  us.  Being  compelled  as  we  were  to  advance  our 
prices  to  take  care  of  increased  cost,  we  neglected  to  urge 
strongly  enough  on  our  customers  the  necessity  of  likewise  get- 
ting these  advances,  and  the  dealer,  in  ignorance  of  what  it  cost 
him  to  do  business,  believed  he  had  sufficient  margin  of  profit  to 
permit  absorbing  most  of  these  advances,  so  retail  prices  re- 
mained about  stationary  while  the  advances  consumed  his  profit, 
and  now  there  are  almost  numberless  cases  where  dealers  are  in- 
different to  wagons  and  many  would  not  handle  them  if  they 
were  not  an  absolute  necessity.  Therefore,  knowing  that  these 
are  facts,  how  can  we  hope  that  somehow  and  sometime  the 
wagon  business  will  right  itself  if  we  sit,  depressed  and  discour- 
aged waiting  for  something  to  turn  up. 

Our  customers  are  being  greatly  helped  by  their  associations 
and  organizations  and  the  manufacturers  in  other  lines  are 
losing  no  opportunity  to  help  them  get  more  light,  and  as  our 
line  needs  more  attention  than  any  other  one  they  are  handling, 
I  feel  that  we  shall  make  a  very  grave  mistake  if  we  do  not  join 
this  forward  movement  to  help  along  this  effect  to  enlighten  our 
trade  as  to  the  costs  of  doing  business,  which  when  fully  realized 
will  so  adjust  selling  prices  that  wagons  will  be  sought  as  a 
leading  line  and  not  handled  as  a  necessity. 

Even  if  this  plan  is  not  a  perfect  one,  the  very  agitation  of  the 
subject  will  direct  more  attention  to  wagons,  which  in  itself  will 
be  helpful,  but  I  feel  confident  that  as  we  are  on  the  verge  of 
more  prosperous  conditions,  and  as  we  are  perfectly  well  aware 
that  there  is  no  possible  chance  of  being  able  to  produce  and  sell 
wagons  at  any  less  than  present  prices,  the  sooner  we  can  by 
any  effort  get  the  dealer  to  realize  the  status  of  the  wagon,  what 
it  costs  to  handle  it  and  what  it  ought  to  be  sold  for  to  be  profit- 
able, the  sooner  we  will  get  what  we  are  hoping  for.  I  have  no 
patience  whatever  with  a  suggestion  made  not  long  ago,  that 
many  dealers  do  not  know  that  they  are  losing  money  on  wagons 
and  if  they  discovered  such  to  be  the  case  they  would  stop  hand- 
ling them.  What  could  be  worse  than  expecting  to  profit  by  a 
customer's  ignorance,  for  if  he  is  losing  money  on  wagons 
through  lack  of  cost  Imowledge  it  is  equally  true  that  he  is  losing 
on  other  lines,  consequently  it  is  merely  a  choice  between  setting 
him  right  now  and  keepmg  him  permanently,  or  taking  the 
usual  receiver's  dividend  some  day  when  suddenly  he  is  com- 
pelled to  quit  business. 

It  is  our  intention  before  sending  out  the  cost  suggestions, 
enclosed  with  my  last  bulletin,  to  enlarge  and  improve  them  by 
illustrated  examples,  of  implements  as  well  as  vehicles,  but  I  do 
not  want  to  push  this  effort  either  in  the  face  of  a  majority  against 
it  or  passive  indifference,  which  is  worse,  therefore  I  ask  you 
whether  this  effort  to  bring  the  whole  retail  implement  and  ve- 
hicle business  to  a  higher  plane,  and  particularly  wagons,  is  suffi- 
ciently worth  while  for  you  to  aid  us  with  practical  cooperation, 
or  had  we  best  wait  and  be  carried  along  by  the  general  forward 
movement. 

68248'— 15 ^15 


226 


FARM-MACHINEBT  TRADE  ASSOCIATIONS. 


PREVENTION   OF  PRICE  CUTTING  AMONG  DEALERS. 


227 


181 


At  the  annual  convention  of  the  National  Association  of  Agricul- 
tural Implement  &  Vehicle  Manufacturers  in  October,  1909,  the 
following  resolution  was  adopted: 

That  we  recommend  to  the  Dealers'  Federation  the  very  great 
importance  of  following  up  and  putting  into  effect  everywhere 
the  plan  suggested  by  the  general  committee  of  the  trade  on  the 
subject  of  the  cost  of  doing  business,  which  would  automatically 
establish  the  proper  retail  price  in  every  locality,  leaving  to  the 
dealer  a  legitimate  profit. 

The  movement  also  received  the  indorsement  of  the  plow  and  seeder 
manufacturers'  associations.  These  associations,  as  well  as  the  Na- 
tional Association  of  Agricultural  Implement  &  Vehicle  Manufac- 
turers, recommended  that  all  their  members  and  branch  houses  join 
the  cost-educational  movement  and  contribute  to  its  support. 

The  cost  of  doing  business  begun  to  be  a  topic  of  great  inter- 
est to  the  dealers,  and  at  the  Federation  meeting  in  October,  1908, 
it  was  one  of  the  principal  subjects  recommended  for  consideration 
by  constituent  associations  and  local  clubs.  Furthermore,  the  Bulle- 
tin for  December,  1908,  stated  that  the  manufacturers  who,  as 
representatives  of  the  National  Association  of  Agricultural  Imple- 
ment &  Vehicle  Manufacturers,  were  attending  the  conventions  of 
retail  implement  dealers'  associations  were  bringing  to  the  dealers' 
attention  the  importance  of  properly  estimating  costs. 

Some  of  the  federated  associations  created  cost  committees.  Mem- 
bers of  the  Iowa  association  were  urged  to  furnish  the  cost  committee 
of  that  association  with  exact  statements  in  regard  to  their  expenses 
of  doing  business. 

At  the  convention  of  the  dealers'  Federation  in  the  latter  part  of 
1909,  the  special  cost  committee  of  manufacturers,  jobbers,  dealers, 
and  trade-paper  representatives  reported  that  replies  from  a  con- 
siderable number  of  dealers  showed  the  minimum  percentage  of  the 
cost  of  doing  a  retail  business  to  be  14  per  cent  and  the  maximum 
22  per  cent. 

This  report  also  suggested  the  establishment  of  a  permanent 
organization  to  dispense  accounting  information  to  the  dealers,  and 
that  this  work  be  assumed  by  the  Federation  with  promises  of 
financial  aid  from  the  manufacturers  and  jobbers.  The  matter  was 
thoroughly  discussed,  and  a  special  committee  of  the  Federation, 
to  which  the  matter  had  been  referred,  made  a  report.  The  Imple- 
ment Dealers'  Bulletin  in  referring  to  this  report  stated  that  the 
committee — 

deemed  it  inexpedient  to  take  up  the  work  of  organizing  and 
maintaining  at  this  time  a  bureau  of  cost  education  and  ac- 
counting; that  such  a  course  was  unadvisable  inasmuch  as  the 
Federation  was  lacking  of  the  necessary  funds  and  that  such 
a  bureau  would  not  be  self  supporting.    It  was  also  reported 


that  it  was  the  belief  of  the  committee  that  the  work  should 
be  carried  on  by  the  manufacturers  and  jobbers  with  such 
assistance  from  the  Federation  and  State  associations  as  they 
were  in  a  position  to  give,  the  grounds  taken  for  this  being 
that  only  a  small  percentage  of  dealers  are  members  of  asso- 
ciations, and  as  the  benefits  of  cost  education  would  be  for  non- 
.  members  as  well  as  members,  it  would  not  be  doing  justice  to 
the  active  members  to  bear  the  burden  of  educating  those  who 
care  nothing  for  association  work  and  its  attendant  results. 

The  report  met  with  the  unanimous  approval  of  the  Federa- 
tion. There  was  no  dissenting  voice  to  the  proposition  that 
cost  accounting  is  of  vital  interest  to  the  retail  dealer  and  it  was 
decided  that  it  should  be  made  the  leading  subject  for  discus- 
sion at  conventions  of  all  constituent  associations  and  that 
jobbers  be  asked  to  close  their  places  of  business  during  the 
session  of  the  convention  when  this  subject  was  on  the  program 
so  that  all  may  attend  and  hear  and  take  part  in  the  discussion. 
It  was  also  arranged  that  another  conference  be  held  in  Kansas 
City  during  the  convention  of  the  Western  association. 

The  following  resolutions  on  the  subjects  of  costs  and  local  clubs 
were  adopted  by  the  Federation  at  this  convention : 

Figuring  costs, — Believing  that  one  of  the  principal  causes  of 
failures  and  of  the  large  per  cent  of  changes  in  the  retail  imple- 
ment business  is  ignorance  as  to  the  cost  of  doing  business,  and 
failures  and  changes  being  very  damaging  to  the  trade  as  well 
as  the  jobbers  and  manufacturers,  we  urge  every  officer  and  mem- 
ber of  constituent  associations  to  study  the  subject  and  take  it 
up  with  his  neighbor.  We  also  urge  special  consideration  of 
this  important  topic  at  the  coming  conventions. 

Local  clubs. — It  is  the  judgment  of  your  committee  that  this 
Federation  and  the  several  constituent  associations  do  not  realize 
the  value  of  local  clubs,  or  greater  effort  would  be  made  to  organ- 
ize them.  Cover  our  territory  with  local  clubs  and  95  per  cent 
of  the  trade  evils  complained  of  will  vanish.  The  local  club 
will  do  more  for  the  retail  trade  than  all  other  agencies  com- 
bined. It  is  not  opposition  that  retards  the  organization  of 
local  clubs;  it  is  inertia,  lassitude,  laziness,  and  a  disposition  to 
look  to  the  other  fellow  to  do  what  you  ought  to  do  yourself. 
The  organization  of  local  clubs  will  sweep  our  territory  like 
wildfire  if  the  prominent,  self-satisfied  members  will  wake  up 
and  put  their  shoulder  to  the  wheel.  And  it  is  further  the  judg- 
ment of  your  committee  that  the  members  of  this  Federation  and 
the  official  members  of  our  several  associations  are  at  fault  in 
that  they  have  not  each  taken  more  aggressive  individual  action 
along  this  line. 

Under  date  of  December  27,  1909,  a  call  was  issued  to  members  of 
the  special  cost  committee  of  manufacturers,  jobbers,  dealers,  and 
trade-press  representatives  for  a  meeting  to  be  held  at  Kansas  City 
in  January,  1910,  at  which  time  the  final  report  would  be  made.  In 
this  letter  it  was  stated  that  cost  education  had  been  the  most  promi- 
nent topic  at  all  conventions  and  annual  meetings  of  retail  imple- 


228 


fARM-MACHINEKY  TBADE  ASSOCIATIONS. 


PREVENTION   OF   PRICE  CUTTING   AMONG  DEALERS. 


229 


I 


ment  dealers  during  the  fall  and  winter;  that  trade  papers  had  given 
aid;  and  the  manufacturers  had  also  done  much  practical  work  in 
addressing  meetings  of  dealers  and  by  giving  cooperation  through 
their  travelers.  It  was  stated  that  the  meeting  had  been  called  to  con- 
sider the  methods  to  be  used  in  continuing  the  work. 

This  meeting  of  the  special  cost  committee  at  Kansas  City  in 
January,  1910,  resulted  in  the  organization  of  the  Cost  Educational 
Association,  to  carry  on  the  cost-accounting  work  among  the  retailers. 
The  secretary  of  the  National  Wagon  Manufacturers'  Association 
was  elected  president  of  the  new  association;  a  representative  of  an 
implement  manufacturing  company  in  Illinois  was  elected  treasurer, 
and  an  executive  committee,  consisting  of  manufacturers,  jobbers, 
dealers,  and  representatives  of  the  implement  trade  press,  was  also 
elected.  The  selection  of  representatives  of  the  traveling  salesmen  to 
serve  on  the  executive  committee  was  left  to  that  committee.  In  com- 
menting upon  the  new  organization,  the  Bulletin  for  February,  1910, 
said  in  part : 

It  is  the  purpose  of  this  association  to  establish  permanent 
headquarters  in  charge  of  a  competent  secretary  and  to  send  out 
to  dealers  information  relative  to  cost  figuring.  Experts  will 
be  put  to  work  devising  systems  for  the  use  of  dealers  in  keeping 
track  of  their  business. 

It  is  the  greatest  work  ever  attempted  to  place  the  implement 
business  uj)on  a  more  profitable  basis,  and  the  interest  dealers 
are  taking  in  it  is  manifested  by  the  large  attendance  at  the  ses- 
sions of  all  of  the  conventions  when  ^t  was  up  for  discussion. 
They  are  ea^r  for  information  and  enlightenment  upon  any 
point  that  will  tend  to  make  their  business  more  profitable. 

The  president  of  the  Western  association  in  a  message  to  members, 
published  in  the  Bulletin  for  February,  1910,  said  in  part : 

If  we  renew  our  allegiance  to  the  association,  study  our  busi- 
ness from  a  profit-getting  standpoint  and  make  a  success  of  it, 
we  will  build  up  the  personnel  of  our  members  and  put  our  busi- 
ness on  a  conmiercial  basis  where  the  retail  implement  and 
vehicle  dealer  will  no  longer  have  a  questionable  rating  and  his 
business  will  be  a  satisfactory  one. 

From  the  time  of  the  formation  of  the  Cost  Educational  Associa- 
tion, the  Federation  and  its  constituent  State  and  interstate  associa- 
tions took  renewed  interest  in  the  local-club  movement.  Some  asso- 
ciations employed  county  agents  to  organize  local  clubs.  The  Bulle- 
tin asserted  that  it  had  been  the  experience  of  local-club  workers 
that  care  should  be  taken  not  to  cover  too  much  territory.  Eeferring 
to  local  clubs,  it  was  said: 

They  should  be  just  what  the  name  implies,  local  organiza- 
tions, because  it  is  local  conditions  with  which  they  must  cope. 
They  should  cover  what  might  be  tenned  competitive  territory. 


Sometimes  territory  can  not  be  confined  to  county  lines,  but  it 
should  be  so  arranged  as  to  take  in  dealers  who  come  in  close 
competition  with  one  another. 

Letters  published  in  the  Bulletin  in  1910  reported  the  proceedings 
at  meetings  of  various  local  clubs.  The  report  of  a  meeting  of  a  local 
club  in  Marshall  County,  Iowa,  contained  in  the  Bulletin  for  July, 
1910,  read  in  part  as  follows : 

The  meeting  was  very  informal.  Every  man  had  a  right  to 
talk  back  or  ask  questions,  and  the  friendly,  yet  spirited  way  in 
which  the  troublesome  questions  were  discussed  was  indeed  re- 
freshing and  gives  promise  of  better  things. 

This  club  has  accomplished  greet  things.  It  is  indeed  a  model 
club  and  it  is  hoped  it  will  be  as  the  leaven  that  shall  leaven  the 
whole  State.  The  members  have  not  only  increased  their  prices, 
but  reduced  their  expenses  and  are  doing  more  business  with 
less  friction,  thus  eliminating  unpleasant  competition. 

Another  item  in  this  issue  of  the  Bulletin  stated  that — 

The  members  of  Local  Number  30  seem  to  be  well  pleased 
with  conditions  this  season.  They  have  all  been  upon  friendly 
terms,  and  there  has  been  practically  no  price  cutting  on  imple- 
ments. They  naturallv  feel  that  their  local  club  has  been  of 
great  value  to  them.  A  meeting  of  the  club  will  be  held  before 
fall  trade  commences. 

In  December,  1909,  the  special  joint  committee  on  costs  sent  out  a 
card  intended  for  circulation  among  retailers.  (See  p.  224.)  This 
card  was  entitled  "  What  does  it  cost  you  to  do  business?  "  In  May, 
1910,  the  Cost  Educational  Association  issued  a  folder  entitled  "  Sug- 
gestions No.  2."  These  two  circulars  are  shown  as  Exhibits  27  and 
28,  respectively.  Both  recommended  that  dealers  in  figuring  costs 
should  include  interest  on  total  investment,  rental  on  buildings  owned 
and  used  in  the  business,  and  a  salary  for  the  services  of  proprietor, 
as  well  as  for  employees.  The  significance  of  this  method  of  comput- 
ing costs  is  referred  to  elsewhere.    (See  p.  241.) 

At  the  convention  of  the  Federation  in  October,  1910,  the  presi- 
dent referred  to  the  Cost  Educational  Association  as  follows : 

This  association  should  receive  the  support  of  every  manu- 
facturer, jobber  and  retail  dealer  in  the  land,  and  if  it  can  work 
out  some  plan  by  which  it  can  show  the  price  cutting  dealer 
when  he  first  engages  in  business,  what  he  sees  after  he  has  lost 
his  money  and  he  finds  himself  a  bankrupt,  it  will  have  done 
great  good.  We  commend  this  association  and  bespeak  for  it 
your  consideration,  encouragement  and  support. 

The  report  at  this  meeting  of  the  chairman  of  the  committee  on 
local  clubs  showed  that  the  movement  was  growing  and  declared 
that  none  of  the  clubs  fostered  bv  the  constituent  associations  of  the 
Federation  attempted  to  maintain  a  schedule  of  prices,  but  that, 


230 


PARM-MACHINEBY  TRADE  ASSOCIATIONS. 


through  the  medium  of  these  clubs,  many  of  the  evils  of  the  trade 
had  been  eliminated.  At  this  convention  a  conference  was  held 
with  the  executive  committee  of  the  Cost  Educational  Association. 
The  chairman  of  the  latter  reported  the  progi*ess  that  had  been  made 
and  appealed  for  even  better  cooperation  on  the  part  of  all  branches 
of  the  trade,  not  only  in  a  financial  way  but  by  better  organization 
of  cost  committees,  local  clubs,  etc.,  for  the  purpose  of  getting  mem- 
bers to  do  personal  work.  A  general  discussion  took  place,  the 
delegates  present  pledging  the  support  of  their  associations  in  this 
movement.  The  president  of  the  Federation  is  reported  to  have 
stated  that  inasmuch  as  there  were  many  dealers  who  would  never 
be  reached  by  any  cost  educational  suggestions  they  should  be 
weeded  out  and  that  it  was  incumbent  upon  manufacturers  to  care- 
fully investigate  prices  made  by  such  dealers  with  a  view  to  dis- 
continuing business  relations  with  those  known  to  persistently  sell 
at  prices  embracing  no  profit  whatever. 

The  organized  dealers  regarded  the  plan  for  the  organization  of 
the  National  Implement  &  Vehicle  Association  in  the  latter  part  of 
1910  as  affording  the  means  of  maintaining  a  cost  educational  de- 
partment that  would  mean  much  to  the  retailer  in  view  of  the  pros- 
pect for  a  real  campaign  to  be  carried  on  with  new  dealers.  The 
report  of  the  manufacturers'  committee  on  consolidation  on  this  sub- 
ject read  as  follows : 

In  this  department  it  is  not  alone  a  question  of  collecting  and 
furnishing  data  as  to  the  best  method  of  computing  cost  for 
the  manufacturer,  but  to  go  one  step  farther  and  endeavor  to 
supply  information  to  our  retail  customers  as  to  the  best  method 
of  their  determining  the  cost  of  doing  business. 

Briefly  stated,  the  gi'eater  percentage  of  those  already  en- 
gaged and  those  entering  the  implement  and  vehicle  business  are 
men  with  only  a  limited  amount  of  business  training,  yet  we 
loan  our  capital  on  longer  time  than  any  bank,  and  without  any 
security,  simply  on  our  estimate  from  secondhand  information, 
that  they  will  come  out  all  right,  and  we  find  many  times  to 
our  sorrow  that  failures  are  caused  simply  by  the  lack  of  knowl- 
edge of  the  cost  of  doing  business  in  the  retail  trade. 

Financial  failures  can  greatly  be  reduced  by  supplying  in- 
formation to  the  trade  which  we  will  be  able  to  do  through  a 
well  equipped  organization  in  this  department. 

In  January,  1911,  the  president  of  the  Cost  Educational  Associa- 
tion discussed  its  work  before  the  convention  of  the  dealers  belonging 
to  the  Western  association  in  part  as  follows : 

The  executive  committee  of  the  association  has  met  in  Chicago 
three  times  during  the  year,  namely,  February  10,  June  16  and 
October  11.  All  these  meetings  were  well  attended  and  work 
planned,  which  has  since  been  carried  out  as  far  as  possible. 


•   ''   • 


PREVENTION   OF   PRICE   CUTTING   AMONG  DEALERS.  231 

The  first  piece  of  cost  literature  sent  out  by  the  association 
was  entitled,  "Suggestions,  No.  1,"  containing  rules  for  the 
figuring  of  costs,  of  which  approximately  100,000  were  printed, 
part  of  them  distributed  gratis,  and  again,  quantities  sold  to 
manufacturers  and  associations  for  distribution  among  their 
customers  and  members.  This  was  followed  later  by  the  issu- 
ance of  a  folder  entitled  "  Suggestions,  No.  2,"  containing  a  re- 
vision and  detailed  explanation  of  the  same  rules  for  figuring 
costs,  together  with  a  table  for  readily  determining  the  selling 
price  of  any  article,  based  on  a  knowledge  of  the  per  cent  of  cost 
and  profit,  using  as  a  basis  the  purchase  price  of  the  goods.  These 
folders  have  been  supplied  to  every  dealers'  convention  held  this 
year  who  accepted  our  suggestion  to  distribute  them  at  the  time 
of  their  meeting;  fully  80,000  of  them  have  been  sent  out  in 

various  ways.  ^  ,  x     i.  u         -^ 

Our  work  has  necessarily  been  done  to  a  large  extent  by  corre- 
spondence, and  we  have  by  this  means  urged  upon  the  various 
associations  throughout  the  country  that  the  subject  of  costs 
be  made  a  special  feature  on  their  convention  programs,  which 
request  met  with  a  most  enthusiastic  response  and  in  most  in- 
stances the  greater  part  of  one  day  of  the  various  conventions 
has  been  devoted  to  cost  educational  work. 

«♦♦♦*•• 

I  would  like  to  call  particular  attention  to  the  fact  that  more 
conventions  in  the  Middle  West  have  been  addressed  by  dealers 
than  by  manufacturers,  which  to  me  is,  as  it  must  also  be^to  vou, 
a  most  encouraging  sign  of  the  progress  being  made. 
During  these  talks  the  progress  made  in  organizing  permanent 
cost  committees  and  local  clubs  were  reported  on  and  in  every 
instance  where  there  had  been  such  activity  withm  the  territory 
of  any  association  reports  as  to  improvement  m  profats  and 

selling  conditions  were  very  marked. 

♦  *  *  *  ♦  ♦  • 

There  is  another  feature  I  would  mention  at  this  time,  which 
is  that  in  working  out  these  problems  of  cost  the  manufacturers, 
jobbers  and  dealers  have  been  brought  closer  together  than 
ever  before,  and  from  this  cooperative  work  it  is  not  diflicu  t 
to  see  that  in  time  many  of  the  other  problems  whicli  are  still 
confronting  us  will  be  brought  to  a  satisfactory  solution,  1  be- 
lieve. This  work  has  caused  all  engaged  in  the  implement  and 
vehicle  lines  to  realize  that  their  interest  is  common  in  nearly 
all  of  these  problems,  consequently  they  can  only  hope  for  a 
successful  solution  of  them  by  reasonably  considering  them  to- 
gether. ,  ^  •  •  *  • 

In  closing  this  report,  let  me  say  that  the  progress  of  the 
work  thus  far  has  exceeded  all  expectations,  for  m  the  beginning 
it  was  looked  upon  by  many  as  visionary  and  chimerical,  and 
because  of  its  educational  character  it  was  predicted  that  it 
would  take  years  to  show  results;  but  we  are  conscious  that 
while  the  agitation  has  not  extended  back  more  than  three  years 
and  the  actual  work  only  one  year,  that  the  results  not  only 


m 


tABM-MAOHlNEBY  TBADE  ASSOCIATIONS, 


PEEVENTION   OF  PRICE  CUTTING  AMONG  DEALERS. 


233 


i 


have  justified  every  effort  made  and  every  penny  spent,  but  it 
would  positively  be  a  calamity  if  the  work  was  not  carried  on 
aggressively. 

One  of  the  members  of  the  Western  association  in  an  address  to 
the  members  at  this  time  referred  to  the  cost  educational  movement  in 
the  following  words: 

Now  here  is  the  proposition  before  us — ^these  jobbers  and 
manufacturers  are  all  trying  to  teach  us  how  to  do  business  and 
tell  us  how  to  make  money  by  raising  the  price  in  the  sale  of 
goods,  and  telling  us  how  we  shall  figure  out  the  cost  of  doing 
business  and  also  telling  us  how  we  shall  be  honorable  and  honest 
among  ourselves  to  them. 

Another  member  stated  that  there  was  a  successful  club  in  his  dis- 
trict made  up  of  dealers  from  several  adjacent  counties.  He  said 
they  did  not  try  to  establish  prices,  but  that,  in  his  opinion,  when 
the  dealer  was  in  sympathy  with  his  competitor  prices  would  adjust 
themselves.  Another  member  recommended  that  clubs  be  formed 
early  in  the  season  before  the  trade  opened  up,  stating  that  there  were 
always  certain  dealers  who  start  out  and  make  the  lowest  prices 
early  in  the  season  and  that  they  were  the  men  who  did  the  most 
harm  by  price  cutting. 

The  Cost  Educational  Association  held  a  meeting  at  this  time  at 
which  it  was  decided  not  to  continue  the  association  as  a  separate 
organization,  but  to  divide  the  work  between  the  dealers'  Federation 
and  the  National  Implement  &  Vehicle  Association,  the  latter  to 
originate,  print,  and  publish  a  reasonable  amount  of  cost  information 
and  cost  literature,  to  be  distributed  by  the  dealers'  organizations 
among  their  members  and  unorganized  dealers  as  well. 

The  Bulletin  issued  in  March,  1911,  asserted  that  local  clubs  were 
increasing.    It  went  on  to  say : 

There  is  no  movement  so  well  calculated  to  benefit  the  retail 
business  as  this,  and  when  dealers  put  off  so  important  a  matter 
they  simply  stand  in  their  own  light.  There  is  no  reason  why 
competitors  in  any  line  should  not  meet  frequently  to  talk  over 
business  conditions.  We  do  not  mean  by  that  to  agree  upon  a 
schedule  of  prices,  for  that  is  not  only  unlawful  but  entirely 
unnecessary;  but  there  are  a  thousand  and  one  questions  which 
will  come  up,  discussion  of  which  will  be  of  benefit  to  all. 

In  April,  1911,  the  Bulletin  stated : 

It  is  not  always  advisable  to  confine  the  territory  [of  the  local 
club]  to  county  lines,  but  it  is  better  to  take  in  the  towns  which 
come  in  closest  competition  with  each  other. 

At  the  Federation  meeting  in  October,  1911,  the  delegates  dis- 
cussed the  best  methods  of  reaching  dealers  who  take  no  account 
of  the  cost  of  doing  business,  and,  in  this  connection,  some  of  the 
delegates  expressed  the  opinion  that  the  best  way  to  reach  them  was 


\ 


M 


^ 


i 


through  the  manufacturers  whose  goods  they  handle.  The  opinion 
was  freely  expressed  that  most  manufacturers  had  given  too  little 
attention  to  this  important  subject.  The  preponderance  of  opinion, 
however,  was  that  the  local  club  was  the  best  medium  for  promoting 
cost  education  among  the  retail  dealers.  A  committee  was  also  ap- 
pointed to  prepare  a  plan  for  pushing  the  local-club  movement  in 
the  various  constituent  associations.  The  Federation's  committee 
on  local  clubs  reported  that  74  local  associations  or  clubs  had  been 
organized  in  sections  covered  by  the  federated  associations,  of  which 
55  were  in  existence.  In  regard  to  accomplishments  of  such  clubs, 
the  committee  reported  that  dealers  had  been  brought  into  more 
friendly  relations;  their  business  conducted  on  a  more  profitable 
^  basis;  members'  rights,  as  to  territory,  respected;  cost  knowledge 
disseminated;  better  prices  obtained;  and  matters  of  local  interest 
taken  up  and  acted  upon. 

A  representative  of  the  manufacturers'  association  who  was  present 
pledged  the  support  of  manufacturers  in  the  cost  educational  move- 
ment, and  said  in  part: 

We  will  endeavor  to  do  our  part  in  furnishing,  if  you  desire 
them,  speakers  from  our  ranks  to  cooperate  with  you  in  spread- 
ing the  cost  gospel,  and  thus  by  keeping  everlastingly  at  it,  not 
only  at  convention  time,  but  through  local  clubs,  special  cost 
committees,  and  every  other  reasonable  means  we  shall  be  able  to 
make  a  mutually  satisfactory  report  a  year  hence. 

At  the  annual  convention  of  the  National  Implement  &  Vehicle 
Association  held  at  the  same  time  a  separate  department  of  the  sales 
managers  of  concerns  belonging  to  the  association  was  organized. 
From  subsequent  developments,  it  appears  that,  in  addition  to  the 
other  purposes  proposed  for  this  department,  its  organization  was 
intended  as  an  important  step  in  furnishing  assistance  to  dealers  in 
the  cost  educational  campaign.  The  members  of  the  National  Imple- 
ment &  Vehicle  Association  also  adopted  the  following  resolution : 

Whereas,  the  subject  of  the  "cost  of  doing  business"  is  one 
of  the  most  important  now  before  the  trade, 

Therefore,  he  it  resolved,  That  our  members  be  requested  to 
instruct  their  salesmen  to  take  up  and  discuss  the  same  with  the 
retail  dealers  with  whom  they  come  in  touch,  with  the  view  of 
improving  the  condition  of  the  dealers,  and  thus  making  them 
more  permanent  in  the  trade  than  has  been  the  rule  heretofore. 

Furthermore,  the  secretary  and  general  manager  of  the  National 
Implement  &  Vehicle  Association,  in  addressing  the  annual  conven- 
tion of  the  members  of  the  Western  association  in  January,  1912, 
stated  that  he  did  not  believe  that  any  man  who  expected  to  remain 
in  business  could  afford  to  overlook  the  matter  of  local  clubs.  He 
also  stated  his  belief  that  the  manufacturers  would  render  personal 
and  every  other  kind  of  aid  to  help  the  work  along. 


234 


FAKM-MACHINEEY  TRADE  ASSOCIATTONS. 


PREVENTION  OP  PRICE  CTTTTING  AMONG  DEALERS. 


235 


A  representative  of  the  National  Implement  &  Vehicle  Association, 
in  addressing  the  convention  of  the  Minnesota  implement  dealers' 
association  at  this  time,  emphasized  the  great  benefit  of  local  clubs  to 
dealers.    In  this  connection,  he  said  in  part: 

I  know,  of  course,  many  of  these  have  been  formed  and  then 
broken  up,  for  the  reason  that  you  all  would  not  stand  by  your 
agreements  in  regard  to  prices.  But  for  the  time  being  you 
should  forget  such  grievances  and  work  together  to  save  the 
retail  trade  for  yourselves.  Then  after  working  together  for  a 
time  you  can  become  such  friends  that  jrou  may  bring  up  the 
price  question  again  later  on,  but  the  point  I  want  to  impress 
upon  your  minds  is  "  get  together."  Everyone  put  your  shoulder 
to  the  wheel  and  you  wiU  win. 

The  manufacturers  will  help  you  in  this  also,  and  in  fact  in 
every  way  that  will  bring  you  in  a  closer  relationship  with  us. 

Another  representative  of  the  National  Implement  &  Vehicle  Asso- 
ciation, in  addressing  this  convention,  said  in  part: 

It  is  the  stay-at-home  dealers  who  do  the  mischief,  they  are 
the  ones  who  cut  prices  and  demoralize  the  business.  To  reach 
them  form  your  local  clubs.  Get  in  all  the  dealers  in  the  near-by 
towns.  Neither  they  nor  you  are  half  as  bad  as  the  other  thinks 
he  is,  and  you  will  find  this  out  when  you  come  to  know  each 
other  better.  Talk  over  this  cost  question  with  them,  provide 
printed  matter  on  the  subject,  and  eventually  you  will  get  them 
into  the  association,  and  the  implement  business  in  your  section 
will  show  better  results. 

A  representative  of  the  manufacturers,  in  advising  the  Minnesota 
dealers  how  to  reach  dealers  who  would  not  join  the  State  associa- 
tion, advised  the  formation  of  local  clubs.  At  a  banquet  held  at  the 
time  of  this  convention,  attended  by  membei-s  of  the  Minnesota 
dealers'  association  and  the  jobbers  belonging  to  the  jobbers'  club 
of  Minneapolis  and  St.  Paul,  a  prominent  dealer  from  South 
Dakota,  in  an  address  on  the  subject  of  the  benefits  of  cost  account- 
ing, spoke  in  part  as  follows : 

This  association  is  not  complete,  and  will  not  be  complete, 
until  it  reaches  every  dealer  in  the  State,  and  this  certainly  can 
only  be  done  through  local  organizations  or  local  clubs.  If 
your  competitor  is  doing  business  at  a  loss,  probably  he  does 
not' know  it;  but,  nevertheliess,  he  is  forcing  you  to  sell  your 
goods  without  a  profit.  If  you  should  tell  him  that  he  is  doing 
business  at  a  loss  he  would  probably  laugh  at  you.  Under  these 
circumstances  it  may  take  some  pluck  and  it  may  interfere 
somewhat  with  your  ideas  of  dignity  to  ask  your  competitor  to 
meet  with  you  and  talk  over  matters  pertaining  to  your  busi- 
ness, but  your  dignity  will  suffer  far  more  in  a  bankrupt's  court. 
I  believe  that  you  will  be  forced  to  do  it  sooner  or  later,  as  a 
matter  of  self-preservation,  as  the  sooner  you  do  it  the  better. 


% 


* 


> 


There  will  be  but  very  little  price  cutting  when  you  and  your 
competitors  all  know  what  it  costs  to  do  business,  and  how  little 
net  profit  you  are  actually  making. 

*  4i  *  «  #  *  41 

The  manufacturer  and  jobber  owe  to  the  retail  dealer  the 
right  to  select  territory  large  enough  to  safeguard  him  from 
price-cutting  competitor,  and  they  also  owe  to  the  retail  trade 
m  general  the  duty  of  cutting  out  all  dealers  who  are  known  to 
be  price  cutters.  The  tendency  of  manufacturers  and  jobbers 
is  to  increase  the  number  of  agencies  and  decrease  the  size  of  the 
dealer's  territory.  The  mutual  interests  of  such  manufacturers, 
jobbers  and  retailers  demand  the  reverse  of  this  policy,  which 
would  help  to  decrease  the  cost  of  doing  business  for  the  retailer. 

>  During  the  early  part  of  1912  the  Bulletin  reported  the  spread  of 
the  local-club  movement,  especially  in  the  territory  of  the  Western 
association,  and  stated  that  the  subject  of  the  costs  of  doing  business 
was  being  very  generally  discussed.  The  secretary  of  the  Federa- 
tion in  a  general  letter  to  secretaries  of  the  constituent  associations 
in  March,  1912,  said : 

I  want  to  urge  upon  you  the  great  importance  of  the  local  club 
work  and  to  acEnonish  you  to  push  it  with  vigor.  It  is  receiving 
an  impetus  in  many  places  and  the  results  are  remarkable. 
Manufacturers  and  jobbers  are  greatly  interested  and  if  you 
request  it  will  instruct  their  travellers  to  talk  local  clubs  every- 
where they  go. 

Finally,  in  July,  1912,  the  Bulletin  reported  that  a  plan  was  being 
worked  out  by  the  sales  managers'  department  of  the  National  Im- 
plement &  Vehicle  Association  to  push  the  cost  educational  move- 
ment more  vigorously  than  it  had  ever  been  done  before.  The 
details  of  this  plan  were  announced  to  the  Federation  delegates  and 
to  members  of  the  National  Implement  &  Vehicle  Association  at 
annual  meetings  of  each  of  these  organizations  in  October,  1912. 
The  committee  on  terms  and  credits  reported  the  following  resolution 
of  the  Sales  Managers'  Department: 

"  That,  the  association  shall,  through  a  committee,  propose  to 
the  National  Federation  of  Retail  Implement  and  Vehicle  Deal- 
ers' Associations,  which  will  hold  its  annual  convention  at 
Chicago  in  October,  in  furthering  the  work  of  cost  education 
through  the  formation  of  local  clubs  of  dealers,  that  if  the 
Federation  and  its  constituent  associations  will  undertake  to 
form  such  local  clubs,  that  for  every  club  organized  under  the 
constitution  and  by-laws  provided  by  the  Federation,  consisting 
of  not  less  than  ten  implement  dealers,  this  association  will 
undertake  to  provide  for  such  expense  to  the  extent  of  $25  for 
each  club  so  organized.  The  maximum  number  of  clubs  per 
State,  in  this  initial  undertaking,  is  to  be  limited  to  ten,  and 
this  proposition  is  understood  to  apply  to  the  territory  covered 
by  the  fifteen  organizations  now  included  in  the  Federation. 


^1* 


236 


FABM-MACHINERY  TBADE  ASSOCIATIONS. 


PREVENTION   OF   PRICE  CUTTING  AMONG  DEALERS. 


237 


II 


"  The  financial  assistance  suggested  above  is  not  to  be  provided 
ont  of  the  funds  of  our  association,  but  is  to  be  raised  by  solici- 
tation among  the  members  of  the  association.  Furthermore, 
that  in  carrying  out  this  plan,  it  is  understood  that  the  sales 
managers'  department  of  this  association  will  undertake,  in  co- 
operation with  the  various  State  dealers'  associations,  to  assist 
them  in  the  formation  of  said  clubs,  by  providing  the  personal 
assistance  of  some  of  their  members  to  accompany  the  officers 
of  said  dealers'  associations  when  the  formation  of  a  club  is  con- 
templated and  assistance  is  desired/' 

Continuing,  the  report  of  the  committee  on  terms  and  credits  read 

as  follows: 

You  will  see  by  the  above  resolution  that  our  association  is  to 
undertake  to  help  bear  the  expense  of  the  organization  of  local 
clubs  in  fifteen  of  the  retail  dealers'  associations,  to  the  extent 
of  ten  in  each  association,  if  called  on  to  do  so.  They  also  have 
offered  to  provide  the  personal  assistance  of  some  of  our  members 
to  accompany  the  officers  of  said  dealers'  associations  to  help  in 
the  formation  of  these  clubs  contemplated,  if  this  help  is  desired. 

This  proposition  was  presented  to  the  Federation  on  Oct.  9, 
at  the  annual  meeting  in  Chicago,  and  the  Federation  accepted 
same,  and,  as  was  expressed  by  one  of  the  delegates,  "  This  was 
the  most  valuable  aid  that  manufacturers  have  ever  offered  to 
the  retail  dealer,  not  alone  considering  it  from  the  standpoint 
of  the  money  we  were  going  to  contribute  but  the  personal 
assistance  we  offered  in  this  work  "—because  they  felt  that  along 
with  our  contributions  is  bound  to  come  our  personal  efforts  in 
other  directions. 

Your  committee  feels  that  this  is  one  of  the  most  advanced 
steps  ever  taken  by  this,  or  any  other  association,  to  better  the 
business  condition  of  its  customers,  and  will  do  more  to  do  away 
with  misunderstandings  that  arise  from  time  to  time  between 
the  manufacturer  and  the  dealer,  than  any  other  one  thing.  To 
carry  on  this  work  contemplated  it  will  not  alone  require  the 
raising  of  the  funds  that  we  have  agreed  to  furnish,  but  it  will 
entail  a  considerable  amount  of  extra  work  on  the  part  of  our 
secretary  and  general  manager,  and  this  committee  wants  to  rec- 
ommend that  our  convention  goes  on  record  approidng  of  this 
plan  and  authorizing  the  establishment  of  a  department  in  our 
organization  especially  equipped  to  help  further  this  work  of  the 
formation  of  local  dubs,  and  that  it  be  done  right  away. 

The  chairman  of  the  committee  explained  this  plan  of  the  sales 
managers'  department  to  carry  the  cost  educational  movement  to 
dealers  who  could  not  be  reached  in  any  other  way.  He  is  reported 
to  have  declared  that,  with  the  assistance  of  the  National  Implement 
&  Vehicle  Association,  the  retail  implement  dealers'  organizations, 
through  the  formation  of  local  clubs,  would  extend  until  within  five 
years  fully  75  per  cent  of  all  the  retail  implement  dealers  in  the 
United  States  would  be  in  touch  with  modem  business  methods. 


« 


At  this  convention  the  members  of  the  association  adopted  a  reso- 
lution which  read  as  follows: 

Whereas,  we  believe  the  most  economical  and  satisfactory  way 
to  place  our.  goods  in  the  hands  of  the  consumer  is  through  the 
retail  dealers,  and  as  so  much  depends  upon  his  welfare,  we 
favor  any  movement  that  tends  to  better  conditions  existing  in 
the  retail  trade ;  therefore 

Be  it  resolved^  That  we  approve  the  action  of  the  executive 
committee  in  its  effort  to  assist  the  officers  of  the  retail  associa- 
tions in  the  establishment  of  local  clubs,  and  that  we  favor  the 
opening  of  a  department  in  our  organization  especially  equipped 
to  take  up  this  work,  and  also  urge  the  hearty  cooperation  of  all 
of  our  members  from  sales  managers  to  traveling  salesmen  to  the 
end  that  the  desired  improvement  may  be  attained  at  once. 

As  indicated  in  the  report  of  the  committee  quoted  above,  the 
proposition  of  the  manufacturers  was  accepted  by  the  Federation. 
It  was  reported  that  in  the  discussion  unanimous  opposition  was 
shown  to  local  clubs  making  any  effort  to  regulate  prices,  as  it  was 
thought  that  "  this  was  not  only  unlawful,  but  had  proved  impracti- 
cable, having  caused  the  dissolution  of  every  club  that  had  under- 
taken it."    The  Federation  delegates  adopted  the  following  resolution : 

Exact  knowledge  of  selling  cost  is  vital  to  success,  and  there  is 
no  other  place  where  cost  accounting  can  be  learned  so  well  as 
in  the  local  club.  But  no  club  and  no  dealers'  association  has 
ever  been  successful  in  fixing  prices.  Never  try  it.  Be  honest 
with  each  other  and  with  yourselves.  Learn  to  know  exactly 
what  it  costs  you  to  do  business,  and  the  retail  prices  will  take 
care  of  themselves. 

A  committee  was  appointed  to  work  out  the  details  of  the  plan 
proposed  by  the  sales  managers,  and  it  was  decided  that  each  club  to 
be  formed  thereunder  should  be  required  to  adopt  the  constitution 
and  by-laws  recommended  by  the  National  Federation.  (See  Exhibit 
25.)     These  articles  of  association  provide  as  follows: 

No  article  or  by-laws  shall  be  adopted  which  will  conflict  with 
the  regulations  of  the  constituent  association  under  which  this 
club  is  organized,  nor  with  those  of  the  National  Federation  of 
Retail  Implement  and  Vehicle  Dealers'  Associations,  of  which 
it  is  a  member. 

Furthermore,  the  articles  of  association  recommended  by  the 
Federation  for  adoption  by  the  constituent  State  and  interstate  asso- 
ciations provide: 

Section  1.  No  rules,  regulations  or  by-laws  shall  be  adopted 
in  anjr  manner  stifling  competition,  limiting  production,  re- 
straining trade,  regulating  prices,  or  pooling  profits. 

Section  2.  No  coercive  measures  of  any  kind  shall  be  prac- 
ticed or  adopted  toward  any  retailer,  either  to  induce  him  to 
join  the  association,  or  to  buy  or  to  refrain  from  buying  of  any 
particular  manufacturer  or  wholesaler.    Nor  shall  any  discrimi- 


i 


288 


FABM-MACHINERY  TRADE  ASSOCIATIONS. 


natory  practices  on  the  part  of  this  association  be  used  or  al- 
lowed against  any  retailer  for  the  reason  that  he  ma v  not  be  a 
member  of  the  association,  or  to  induce  or  persuade  him  to  be- 
come such  member.  i  •  j  r  n  u 
Section  3.  No  promises  or  agreements  of  ahy  kmd  shall  be 
requisite  to  membership  in  this  association,  nor  shall  any  penal- 
ties be  imposed  upon  its  members  for  any  cause  whatsoever. 

In  referring  to  this  plan  of  cooperation  between  the  National 
Federation  and  the  National  Implement  &  Vehicle  Association  in 
extending  the  local-club  movement,  the  secretary  of  the  Western 
association  in  his  annual  report  to  the  members  of  that  association 
in  January,  1913,  made  a  statement  which  was  in  part  as  follows : 

Among  the  very  important  things   accomplished  the  past 
year  is  securing  the  cooperation  of  the  manufacturers  in  the 
local  club  movement.    Their  willingness  to  assist  shows  that 
they  are  interested  in  the  retail  dealer  and  that  they  look  upon 
him  as  a  part  of  their  business  organization.    That  well-organ- 
ized local  clubs  can  be  made  to  revolutionize  the  implement 
business  has  been  demonstrated  in  many  localities,  and  manu- 
facturers have  come  to  believe  that  it  is  worth  while  to  render 
assistance  in  advancing  this  work,  and  surely  dealers  should 
show  their  interest.    The  proposition  which  was  presented  by 
the  sales  managers'  committee  of  the  National  Implement  and 
Vehicle  Association  to  the  National  Federation  and  approved 
by  that  body  after  a  full  and  free  discussion  contemplates  both 
personal  and  financial  assistance.    I  regard  the  benefit  to  be 
derived  from  this  offer  of  assistance  to  be  twofold.    It  brings 
the  sales  manager  in  closer  touch  with  the  retail  trade :  not  only 
will  they  assist  in  organizing  local  clubs  and  drop  a  few  hints 
about  cost  accounting,  etc.,  but  they  will  come  into  closer  con- 
tact with  the  irregularities  of  the  business.    When  they  and 
their  representatives  go  into  the  local  club  meetings  they  will 
learn  what  the  element  of  unrest  is  that  is  causing  so  much 
trouble  and,  if  only  for  their  own  protection,  will  seek  a  remedy. 
I  want  to  go  upon  record  as  characterizing  this  movement 
as  the  greatest  ever  undertaken  to  bring  about  better  condi- 
tions.   The  manufacturers  have  gone  into  it  with  enthusiasm. 
They  see  in  it  wonderful  possibilities  if  only  dealers  will  do 
their  part,  and  I  beg  of  you  to  do  it.    With  further  reference 
to  this  I  can  not  do  better  than  quote  from  my  report  to  the 
Federation :  "  There  is  no  need  of  our  taking  this  advance  step 
in  association  work  in  a  lukewarm  sort  of  way.    We  are  going 
to  have  to  show  that  we  mean  business  if  we  expect  the  coop- 
eration of  the  manufacturers,  for  it  is  going  to  cost  them  a  large 
sum  of  money  and  they  expect  results." 
At  this  meeting  the  secretary  and  general  manager  of  the  National 
Implement  &  Vehicle  Association  also  addressed  the  members  of  the 
Western  association  on  this  subject.    He  spoke  in  part  as  follows; 
I  believe  the  Western  association  was  the  originator  of  the 
local-club  idea.    Anyway,  it  is  simply  a  little  closer  organiza- 
tion—a  getting  together  of  your  neighbors,  a  getting  together 
with  the  man  down  the  street  who  sells  at  a  less  price  than  you; 


*   1   • 


II 


PREVENTION   OF  PRICE  CUTTING  AMONG  DEALERS. 


239 


ijH 


it  is  simply  getting  together  with  him  and  figuring  on  the  cost 
of  doing  business. 

The  question  is.  How  can  the  dealer  make  a  fair  profit? 
Other  things  are  minor.  To  start  in  and  talk  of  selling  prices 
is  absolutely  illegal  and  absolutely  unnecessary,  but  you  can  fix 
in  your  mind  and  in  the  mind  of  your  competitor  that  an  article 
that  cost  $40  can  not  be  sold  for  $39.  The  trouble  is  we  do  not 
know  where  that  $40  line  is,  and  the  local  club  is  the  solution. 

This  thing  has  been  bearing  upon  the  minds  of  the  manufac- 
turers for  a  long  time.  Don't  you  think  that  they  are  unaware 
of  the  catalog  house  competition  and  other  kinds  of  competi- 
tion; don't  you  believe  that  they  are  simply  trying  to  get  all 
the  price  they  can  out  of  you.  They  have  found  that  through 
y.  economic  waste  the  retail  dealer  throughout  the  country  is  fail- 
ing at  the  rate  of  25  to  33 J  per  cent  every  year.  Now,  that 
means  to  them  that  new  dealers  are  coming  in  to  take  their 
place,  and  results  in  a  disarranging  of  business.  It  is  the  inde- 
pendent competitor  that  you  have  the  least  to  fear  from.  Now 
to  assure  you  of  the  sympathy  and  cooperation  of  the  manufac- 
turers, they  will  pay  $25  toward  the  establishment  of  each  local 
club,  and  as  a  starter  will  allow  you  that  for  each  local  club  of 
ten  in  each  association  territory,  that  is  clubs  that  approximate 
ten  persons  to  the  club. 

Now  just  think  if  you  take  advantage  of  that  offer  and  organ- 
ize that  many  clubs  over  this  whole  territory  what  a  help  it  will 
be  to  you !  This  is  a  business  proposition.  The  manufacturers 
are  putting  in  their  money  to  assure  you  of  the  cooperation  of 
the  National  Implement  and  Vehicle  Association,  which  repre- 
sents the  manufacturers.  They  have  planned  to  set  apart  a 
department  in  that  association,  with  competent  help  in  charge, 
to  act  with  the  State  secretary. 

At  the  annual  meeting  of  the  National  Federation  in  October, 
1913,  the  secretary  reported  that  abundant  evidence  had  been  fur- 
nished of  the  wisdom  of  the  plan  of  the  manufacturers'  association 
to  advance  the  local-club  movement.  Forty  local  clubs  had  been 
organized  during  the  year  under  the  special  offer  of  the  manufac- 
turers.^ One-half  of  this  number  of  clubs  had  been  (organized  in 
the  territory  covered  by  the  Western  and  Minnesota  associations. 
Eight  clubs  had  been  formed  in  Iowa,  four  in  Wisconsin,  three  in 
Illinois,  two  each  in  Michigan  and  the  Omaha  jobbing  territory,  and 
one  in  Colorado.  Furthermore,  the  secretary  asserted  that  the  deal- 
ers were  on  the  right  track  in  encouraging  local  organization;  that 
it  was  the  only  way  in  which  mercantile  knowledge  could  be  brought 
to  the  attention  of  a  certain  class  of  dealers. 

At  a  conference  between  the  delegates  to  the  annual  meeting  of 
the  Federation  and  a  committee  of  the  National  Implement  & 
Vehicle  Association  in  October,  1913,  one  of  the  dealers  asserted 
that  one  of  the  important  problems  of  the  local  clubs  was  to  main- 
tain interest  on  the  part  of  their  members.    He  stated  that  sugges- 

1  In  this  connection,  see  Exhibit  30. 


240 


FABM-MACHINEBY  TEADE  ASSOCIATIONS, 


/ 


PREVENTION  OP  PRICE  CUTTING  AMONG  DEALERS. 


241 


tions  had  been  made  for  the  employment  of  a  local-club  organizer 
or  a  superintendent.  One  of  the  manufacturers  replied  that  if  the 
dealers  did  not  take  sufficient  interest  in  their  clubs  to  keep  them 
going,  there  was  no  way  in  which  they  could  be  maintained.  He 
stated  that  the  manufacturers  were  showing  increased  interest  in 
the  local-club  movement  and  that  the  National  Implement  &  Ve- 
hicle Association  was  prepared  to  renew  its  offer  of  financial  assist- 
ance in  the  organization  of  local  clubs  and  was  making  plans  to 
extend  the  local-club  movement. 

In  October,  1914,  the  executive  committee  of  the  National  Imple- 
ment &  Vehicle  Association  reported  that  during  the  preceding  year 
the  association  had  contributed  over  $1,200  to  the  cast-educational 
work  among  the  dealers  and  recommended  that  the  work  should  be 
continued  during  the  ensuing  year.  As  shown  elsewhere  (see  p.  53), 
the  furnishing  of  information  to  the  retail  trade  on  the  subject  of  cost 
accounting  is  one  of  the  functions  contemplated  for  a  department  or 
bureau  of  the  National  Implement  &  Vehicle  Association,  a  plan  which 
was  referred  to  with  approval  by  the  president  and  the  committee  on 
manufacturing  costs  at  the  annual  convention  in  October,  1914. 

The  secretary  of  the  Federation  of  dealers'  associations  in  his 
report  to  the  delegates  present  at  the  annual  meeting  of  that  organi- 
zation in  October,  1914,  stated  that  the  sentiment  in  favor  of  local 
organization  among  the  dealers  was  growing,  that  the  work  done  by 
many  of  the  local  clubs  was  having  its  influence,  and  that  the  assist- 
ance rendered  by  the  manufacturers  had  given  the  work  an  impetus. 
He  stated  that  the  chief  reason  why  more  clubs  had  not  been  organ- 
ized was  because  of  lack  of  funds.  He  asserted  that  the  most  effective 
way  to  organize  was  to  place  an  organizer  in  thf>  field,  but  that  few 
of  the  associations  had  the  money  for  that  purpose.  The  secretary 
of  the  National  Implement  &  Vehicle  AssociatioL  promised  the  con- 
tinued financial  assistance  of  the  manufacturers'  association  in  the 
extension  of  local  clubs. 

At  this  meeting,  the  Federation  delegates,  after  discussing  the 
Stevens  bill  pending  in  Congress  to  permit  manufacturers  of  trade- 
marked  goods  to  determine  resale  prices  at  which  their  products 
were- sold,  decided  that  the  n.«iasure  would  be  of  no  benefit  to  the 
implement  trade,  and  they  tabled  a  motion  to  approve  the  bill.^  At 
this  meeting  they  subsequently  adopted  a  resolution  asserting  the 
belief  that — 

No  man  is  considered  a  good  dealer  who  does  not  know  the 
cost  of  doing  business.  The  place  to  learn  this  is  the  local 
club.  *  *  *  we  urge  upon  our  several  official  boards  the 
supreme  importance  of  pushmg  the  local  club  movement  during 
the  coming  winter  far  more  strenuously  than  ever  before. 

iln  January.  1915,  however,  the  Western  association  went  on  record  In  faTor  ot  tb* 
BteTens  bUl.    (See  p.  208.) 


Section  6.  Significance  of  cost  suggestions  as  a  basis  for  retail  prices. 

The  ostensible  purpose  of  the  campaign  for  cost  education  is  to 
prevent  inexperienced  and  unbusinesslike  dealers  from  selling  at 
prices  that  do  not  include  full  allowance  for  all  elements  of  expense. 
As  already  indicated,  however,  the  "cost  suggestions"  of  the  Cost 
Educational  Association  recommend  the  inclusion  of  allowances  for 
interest  on  the  investment,  rent  of  buildings  owned  and  used  in  the 
business,  and  a  salary  for  the  proprietor.  Some  of  these  items  are 
not  properly  a  part  of  the  dealer's  cost.  Indeed,  the  cost  of  a  ma- 
chine computed  on  the  basis  recommended  is  practically  equivalent 
to  a  fair  selling  price.  This  fact  strongly  supports  the  view  that  the 
^cost-educational  movement  has  been  adopted  as  a  discreet  method  of 
determining  prices,  and  tends  to  produce  results  hardly  distinguish- 
able from  those  produced  by  a  price  agreement  among  competing 
retailers.  This  fact  also  explains  why  so  much  attention  has  been 
given  by  the  organized  manufacturers,  as  well  as  by  dealers,  to  the 
formation  of  local  clubs  as  a  means  of  securing  the  adoption  of  this 
cost-finding  method  by  all  dealers  competing  with  each  other  in  their 
respective  localities. 

The  public  concern  in  this  method  of  determining  retail  prices  is 
the  same  as  in  the  method  of  computing  wholesale  prices  recom- 
mended by  the  National  Implement  &  Vehicle  Association  for  adop- 
tion by  manufacturers,  for  it  is  easy  to  see  that  when  dealers  discuss 
the  relation  of  costs  and  prices  there  must  often  be  a  strong  tempta- 
tion to  have  some  sort  of  an  understanding  regarding  selling  prices. 
That  there  is  a  tendency  to  attempt  such  understandings  by  members 
of  local  clubs  is  admitted.  In  this  connection,  one  of  the  manufac- 
turers belonging  to  the  National  Implement  &  Vehicle  Association 
who  has  been  most  active  in  the  local-club  and  cost-educational  move- 
ment, in  an  address  at  a  meeting  of  the  Tri- State  Vehicle  &  Imple- 
ment Dealers'  Association  in  the  latter  part  of  1912,  is  quoted  in  part 
as  follows: 

From  the  experience  I  gained  last  winter  in  assisting  in  or- 
ganizing some  local  county  clubs  in  my  own  State  of  Wisconsin, 
there  is  one  thing  I  wish  to  warn  you  about,  and  that  is  the 
tendency  to  establish  a  uniform  retail  price  on  the  main  goods  in 
your  line. 

Now,  first  of  all,  this  is  illegal,  impracticable  and  absolutely 
unnecessary.  Every  man  should  make  his  own  prices,  based  on 
his  costs  and  expense  of  doing  business  (which  is  a  part  of  the 
costs),  and  then  add  whatever  profit  he  wishes  to  make,  and  let 
his  competitor  work  along  the  same  line.  There  are  many  other 
very  important  and  valuable  things  that  can  be  done  by  coop- 
erative work  in  these  clubs,  which  will  justify  their  existence 
and  be  of  value  to  the  dealer  living  in  the  counties,  and  who  have 

68248-— 15 ^16 


x^ 


\ 


p 


240 


FABM-MACHINEKY  TRADE  ASSOCIATIONS. 


/ 


tions  had  been  made  for  the  employment  of  a  local-club  organizer 
or  a  superintendent.  One  of  the  manufacturers  replied  that  if  the 
dealers  did  not  take  suflScient  interest  in  their  clubs  to  keep  them  i^      ^# 

going,  there  was  no  way  in  which  they  could  be  maintained.  He 
stated  that  the  manufacturers  were  showing  increased  interest  in 
the  local-dub  movement  and  that  the  National  Implement  &  Ve- 
hicle Association  was  prepared  to  renew  its  offer  of  financial  assist- 
ance in  the  organization  of  local  clubs  and  was  making  plans  to 
extend  the  local-club  movement  % 

In  October,  1914,  the  executive  committee  of  the  National  Imple- 
ment &  Vehicle  Association  reported  that  during  the  preceding  year 
the  association  had  contributed  over  $1,200  to  the  cost-educational 
work  among  the  dealers  and  recommended  that  the  work  should  be 
continued  during  the  ensuing  year.  As  shown  elsewhere  (see  p.  53), 
the  furnishing  of  information  to  the  retail  trade  on  the  subject  of  cost  % 
accounting  is  one  of  the  functions  contemplated  for  a  department  or 
bureau  of  the  National  Implement  &  Vehicle  Association,  a  plan  which 
was  referred  to  with  approval  by  the  president  and  the  committee  on 
manufacturing  costs  at  the  annual  convention  in  October,  1914. 

The  secretary  of  the  Federation  of  dealers'  associations  in  his 
report  to  the  delegates  present  at  the  annual  meeting  of  that  organi-  i»  |  # 
zation  in  October,  1914,  stated  that  the  sentiment  in  favor  of  local 
organization  among  the  dealers  was  growing,  that  the  work  done  by 
many  of  the  local  clubs  was  having  its  influence,  and  that  the  assist- 
ance rendered  by  the  manufacturers  had  given  the  work  an  impetus. 
He  stated  that  the  chief  reason  why  more  clubs  had  not  been  organ- 
ized was  because  of  lack  of  funds.  He  asserted  that  the  most  effective  \ 
way  to  organize  was  to  place  an  organizer  in  the  field,  but  that  few 
of  the  associations  had  the  money  for  that  purpose.  The  secretary 
of  the  National  Implement  &  Vehicle  AssociatioL  promised  the  con- 
tinued financial  assistance  of  the  manufacturers'  association  in  the 
extension  of  local  clubs. 

At  this  meeting,  the  Federation  delegates,  after  discussing  the  ^  I  # 

Stevens  bill  pending  in  Congress  to  permit  manufacturers  of  trade- 
marked  goods  to  determine  resale  prices  at  which  their  products 
were  sold,  decided  that  the  measure  would  be  of  no  benefit  to  the 
implement  trade,  and  they  tabled  a  motion  to  approve  the  bill.^  At 
this  meeting  they  subsequently  adopted  a  resolution  asserting  the 
belief  that—  g^ 

No  man  is  considered  a  good  dealer  who  does  not  know  the 
cost  of  doing  business.  The  place  to  learn  this  is  the  local 
club.  ♦  ♦  *  we  urge  upon  our  several  oflficial  boards  the 
supreme  importance  of  pushmg  the  local  club  movement  during 
the  coming  winter  far  more  strenuously  than  ever  before. 


1  In  January.  1915,  however,  the  Western  association  went  on  record  In  faTor  of  tb« 
Stevens  bUl.     (See  p.  208.) 


PBEVENTION  OF  PBICE  CUTTING  AMONG  DEALERS. 


241 


Section  6.  Sig^ficance  of  cost  suggestions  as  a  basis  for  retail  prices. 

The  ostensible  purpose  of  the  campaign  for  cost  education  is  to 
prevent  inexperienced  and  unbusinesslike  dealers  from  selling  at 
prices  that  do  not  include  full  allowance  for  all  elements  of  expense. 
As  already  indicated,  however,  the  "cost  suggestions"  of  the  Cost 
Educational  Association  recommend  the  inclusion  of  allowances  for 
interest  on  the  investment,  rent  of  buildings  owned  and  used  in  the 
business,  and  a  salary  for  the  proprietor.  Some  of  these  items  are 
not  properly  a  part  of  the  dealer's  cost.  Indeed,  the  cost  of  a  ma- 
chine computed  on  the  basis  recommended  is  practically  equivalent 
to  a  fair  selling  price.  This  fact  strongly  supports  the  view  that  the 
*^  cost-educational  movement  has  been  adopted  as  a  discreet  method  of 
determining  prices,  and  tends  to  produce  results  hardly  distinguish- 
able from  those  produced  by  a  price  agreement  among  competing 
retailers.  This  fact  also  explains  why  so  much  attention  has  been 
given  by  the  organized  manufacturers,  as  well  as  by  dealers,  to  the 
formation  of  local  clubs  as  a  means  of  securing  the  adoption  of  this 
cost-finding  method  by  all  dealers  competing  with  each  other  in  their 
respective  localities. 

The  public  concern  in  this  method  of  determining  retail  prices  is 
the  same  as  in  the  method  of  computing  wholesale  prices  recom- 
mended by  the  National  Implement  &  Vehicle  Association  for  adop- 
tion by  manufacturers,  for  it  is  easy  to  see  that  when  dealers  discuss 
the  relation  of  costs  and  prices  there  must  often  be  a  strong  tempta- 
tion to  have  some  sort  of  an  understanding  regarding  selling  prices. 
That  there  is  a  tendency  to  attempt  such  understandings  by  members 
of  local  clubs  is  admitted.  In  this  connection,  one  of  the  manufac- 
turers belonging  to  the  National  Implement  &  Vehicle  Association 
who  has  been  most  active  in  the  local-club  and  cost-educational  move- 
ment, in  an  address  at  a  meeting  of  the  Tri- State  Vehicle  &  Imple- 
ment Dealers'  Association  in  the  latter  part  of  1912,  is  quoted  in  part 
as  follows: 

From  the  experience  I  gained  last  winter  in  assisting  in  or- 
ganizing some  local  county  clubs  in  my  own  State  of  Wisconsin, 
there  is  one  thing  I  wish  to  warn  you  about,  and  that  is  the 
tendency  to  establish  a  uniform  retail  price  on  the  main  goods  in 
your  line. 

Now,  first  of  all,  this  is  illegal,  impracticable  and  absolutely 
unnecessary.  Every  man  should  make  his  own  prices,  based  on 
his  costs  and  expense  of  doing  business  (which  is  a  part  of  the 
costs),  and  then  add  whatever  profit  he  wishes  to  make,  and  let 
his  competitor  work  along  the  same  line.  There  are  many  other 
very  important  and  valuable  things  that  can  be  done  by  coop- 
erative work  in  these  clubs,  which  will  justify  their  existence 
and  be  of  value  to  the  dealer  living  in  the  counties,  and  who  have 


68248*— 15- 


-16 


II 


242  FARM-MACHINERY  TRADE  ASSOCIATIONS. 

a  membership  in  them.    Some  of  the  things  that  thev  can  take  up 

that  I  might  suggest  at  this  time,  would  be  first,  the  agreement 

to  get  settlement  for  all  goods  on  delivery,  either  by  cash  or  note, 

the  value  of  which  is  over  ten  dollars. 

In  February,  1913,  the  same  manufacturer,  who  was  then  chairman 

of  the  executive  committee  of  the  National  Implement  &  Vehicle 

Association,  in  writing  to  the  secretary  of  that  association,  made  the 

following  statement  on  the  subject  of  price  discussions  at  meetings  of 

local  clubs: 

The  writer  has  noticed  this  tendency  of  the  dealers  to  talk 
about  price  agreements  at  all  the  meetings  we  have  been  to  and 
we  have  made  it  a  point  to  show  them  that  it  is  impossible  and 
also  impracticable. 
Apparently  to  guard  against  the  danger  of  violating  the  antitrust 
laws  which  may  arise  because  of  this  tendency,  the  National  Imple- 
ment &  Vehicle  Association  has  made  it  obligatory  that  all  local  clubs 
of  dealers  that  are  formed  under  its  offer  of  financial  assistance  shall 
adopt  the  constitution  and  by-laws  for  such  clubs  prepared  by  the 
National  Federation.    In  this  connection,  the  chairman  of  the  execu- 
tive committee  of  the  National  Implement  &  Vehicle  Association  just 
mentioned,  in  writing  to  the  secretary  of  that  association  in  Novem- 
ber, 1912,  said  in  part: 

As  intimated  to  you  the  other  day  in  the  office,  I  am  rather 
inclined  to  believe  you  will  find  that  the  Michigan  Association 
has  had  some  very  unfavorable  experience  in  starting  local  clubs, 
and  we  presume  the  reason  can  be  very  easily  traced  to  the  fact 
that  they  are  using  the  old  method  of  conducting  these  meetings. 
In  connection  with  this  letter,  I  was  going  to  ask  if  you  had 
a  copy  of  the  Federation's  constitution  and  by-laws.  I  think 
you  should  have  some  of  these  printed  right  away  if  Mr.  Hodge 
[the  secretary  of  the  Federation]  is  unable  to  furnish  you  with  a 

I  do  not  know  but  what  I  would  make  some  little  changes  in 
minor  things  in  the  copy  which  you  will  readily  see  when  you 
look  it  over.    I  think  it's  very  unportant  that  we  msert  that  all 
clubs,  to  which  we  are  to  furnish  foiancial  or  personal  help,  must 
be  organized  under  the  constitution  and  by-laws,  as  provided 
for  the  Federation.    This  will  be  our  protection  in  case  the  Gov- 
ernment should  see  fit  to  investigate  any  of  these  clubs. 
The  organized  manufacturers  take  the  position  that  prices  shall 
not  be  discussed  at  local-club  meetings,  except  in  relation  to  the  cost 
of  doing  business,  and  that  no  agreements  or  understandings  should 
in  any  way  be  entered  into.    They  claim  that  agreements  or  under- 
standings are  superfluous;  that  aU  that  is  necessary  is  by  the  study 
of  costs  to  create  in  the  dealer  a  realizing  sense  of  the  fact  that  there 
is  a  dead  line  below  which  goods  can  not  be  sold  except  at  a  loss. 
They  allege  that  the  study  of  costs  is  the  most  effective  way  of  pre- 
venting price  cutting.    The  reason  for  this  exists  in  the  fact  that 


PREVENTION   OF  PRICE  CUTTING  AMONG  DEALERS. 


243 


the  computation  of  costs  on  the  plan  recommended  furnishes  a  figure 
at  which  the  dealer  can  sell  at  a  profit.  In  view  of  this  situation,  the 
formal  articles  of  association  of  the  local  clubs  are  probably  suffi- 
cient to  afford  some  guaranty  against  price  agreements  in  cases 
where  dealers  recognize  the  possibilities  of  profit  in  the  cost  sug- 
gestions originally  prepared  by  the  Cost  Educational  Association, 
especially  when,  through  the  maintenance  of  local  clubs,  every  dealer 
in  any  locality  can  be  induced  to  adopt  these  suggestions  in  fixing 
his  prices.  It  should  be  pointed  out,  however,  that  this  does  not 
mean  the  establishment  of  uniform  retail  prices  so  long  as  each 
dealer  bases  his  prices  upon  his  own  costs.  On  the  other  hand,  atten- 
>tion  should  be  called  to  the  fact  that  it  is  impossible  to  determine 
whether  the  dealers  do  actually  base  their  prices  upon  their  own  costs 
or  whether  prices  are  based  on  the  cost  of  other  dealers,  which  may 
be  disclosed  to  competitors  in  the  interchange  of  information  at 
meetings  of  the  local  club. 

It  appears  that  there  has  been  no  direct  effort  to  establish  a  definite 
percentage  of  selling  price  as  a  standard  rate  of  soiling  cost  for  adop- 
tion by  all  dealers.  From  time  to  time  implement  trade  papers  have 
published  average  percentages  compiled  from  the  reports  of  a  con- 
siderable number  of  individual  dealers,  and  in  a  general  letter  sent  to 
local  clubs  on  May  15, 1914,  the  secretary  of  the  National  Implement 
&  Vehicle  Association  said  that  20  clubs  had  reported  their  average 
costs  of  doing  business  at  figures  ranging  from  14  per  ceut  to  20  per 
cent.    The  average  was  16.9  per  cent.    The  secretary  added: 

No  dealer,  however,  should  accept  this  average  for  finding  the 
selling  prices  of  his  lines,  but  study  his  own  costs  and  use  the 
figures  thus  derived.  The  Local  Club  which  knows  its  average 
cost  of  doing  business  is  progressing.  Has  Your  Club  Got  That 
Far? 

The  apparent  implication  of  this  suggestion  is  to  call  the  attention 
of  the  dealer  to  the  advantage  of  using  the  average  cost  of  his  local 
club  in  fixing  his  prices. 

While  the  cost-educational  movement  has  various  aspects,  the  im- 
portant fact  to  be  considered  is  that  the  method  of  fixing  prices 
through  cooperative  study  of  costs  is  not  merely  susceptible  of  abuse 
in  particular  cases,  but  directly  militates  against  independent  action 
on  the  part  of  competitors. 


I 


I 


EXHIBITS. 


ExiiiniT  1. 


CONSTITUTION   AND    BY-LAWS    OF    THE   NATIONAL    IMPLEMENT 

AND   VEHICLE   ASSOCIATION. 

Constitution. 

article  i. 

This  association  shall  be  known  as  the  National  Implement  and 
Vehicle  Association  of  the  United  States  of  America. 

ARTICLE  n. 

The  object  of  this  association  shall  be  to  take  suitable  and  timely 
notice  of,  and  action  upon,  matters  of  legislation,  national  and  state ; 
matters  concerning  freight  and  transportation,  matters  of  educa- 
tional interest  pertaining  to  trade  and  agriculture,  and  all  those 
matters  attention  to  which,  and  action  upon  which,  will  protect  or 
promote  the  interests  of  its  members,  and  to  foster  and  promote  the 
interests  of  American  agriculture  and  agriculturists. 


ARTICLE  III. 

Section  1.*  Active  members  of  this  association  shall  consist  of 
two  classes : 

Members  of  Class  I  shall  be  persons,  firms  and  incorporated  com- 
panies engaged  in  the  manufacture  and  sale  of  agricultural  imple- 
ments, vehicles  and  lines  allied  thereto  at  wholesale. 

Members  of  Class  II  shall  be  persons,  firms,  incorporated  com- 
panies, branch  houses  or  general  agencies,  not  manufacturers,  en- 
gaged in  the  jobbing,  wholesaling  or  distribution  of  agricultural 
implements,  vehicles  or  lines  allied  thereto. 

Members  of  this  class  shall  be  entitled  to  all  privileges  of  mem- 
bers of  Class  I,  except  that  they  may  not  vote  at  elections  or  hold 
office. 

Section  2.  Associate  members  of  this  association  shall  be  persons 
or  firms  engaged  in  the  manufacture  and  sale  of  merchandise,  ma- 
terials or  accessories  used  or  sold  by  the  active  members  but  who 
are  not  in  competition  with  them. 

Section  3.  The  association  may,  by  vote,  admit  to  honorary  mem- 
bership an)^  person  who,  from  eminence,  shall  seem  entitled  to  such 

^  Sec.  1  as  amended  and  adopted  at  the  annual  convention,  Oct.  19,  1911. 

245 


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EXHIBITS. 


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IIM 


i 


! 


consideration,  and  such  honorary  membership  shall  confer  all  the 
rights  and  privileges  of  active  members  during  life  unless  with- 
drawn for  cause.  But  no  more  than  two  persons  shall  be  admitted 
in  any  one  year. 

ARTICLE  IV. 

Section  1.  The  officers  of  the  association  shall  be  a  president  and 
twelve  vice-presidents,  an  executive  committee  of  twelve,  a  treasurer, 
a  secretary  and  general  manager  and  a  chairman  of  the  executive 
committee,  all  to  be  elected  by  the  ballot  of  the  association,  except 
the  secretary  and  general  manager  and  chairman  of  the  executive 
committee.  The  president,  vice-presidents  and  treasurer  shall  be 
elected  for  a  term  of  one  year,  "rtie  members  of  the  executive  com- 
mittee shall  be  elected  for  a  term  of  three  years.  Four  members  of 
the  committee  shall  be  elected  each  year  for  three  years.  The  time 
of  service  of  all  officers  to  commence  with  the  closing  of  the  annual 
meeting  at  which  they  are  chosen.  The  secretary  apd  general 
manager  shall  be  appointed  by  the  executive  committee. 

Section  2.  A  nominating  committee  of  five  shall  be  selected  by  the 
association  to  present  nam3s  to  be  voted  for  to  fill  the  offices  of  presi- 
dent,  vice-presidents,  treasurer  and  members  of  the  executive  com- 
mittee. 

Section  3.  The  president  shall  be  a  member  of  the  executive  com- 
mittee. 

Section  4.  The  members  of  the  executive  committee  shall  elect* 
their  chairman  from  among  their  members  and  also  have  power  to 
fill  any  vacancy  which  shall  be  occasioned  by  the  death  or  resigna- 
tion 01  any  member  of  that  committee  or  any  other  cause. 

ASnCLB  ▼• 

The  constitution  mav  be  altered  or  amended  as  follows:  The  de- 
sired change  must  be  first  submitted  to  the  executive  committee  for 
its  consideration,  and  if  said  executive  committee  recommend  the 
adoption  of  the  change,  a  copy  of  such  change  must  then  be  mailed 
by  the  secretary  to  each  member  of  the  association  at  least  thirty  days 
in  advance  of  the  annual  meeting,  and  at  least  two-thirds  of  the 
members  present  at  such  meeting  must  vote  in  favor  of  such  change 
before  it  shall  become  a  part  of  the  constitution. 

By-Laws. 

article  I. — OFPICEHS  OP  THE  ASSOCIATION. 

Section  1.  The  officers  of  the  association  shall  be  a  president  and 
twelve  vice-presidents,  a  board  of  twelve  directors,  which  shall  bo 
designated  as  an  executive  committee ;  a  treasurer,  a  secretary  and 
general  manager,  and  a  chairman  of  the  executive  committee. 

Sec.  2.  The  president  shall  be  ex-officio  member  of  the  executive 
committee. 

ARTICLE  n. — duties  OP  OFFICERS. 

Section  1.  The  president  shall  preside  at  all  meetings  of  the  asso- 
ciatioiL 


«t 


ii. 


Sec.  2.  The  president  shall  sign  all  papers  which  are  necessary  for 
the  association  to  sign  under  seal  attested  by  the  secretary. 

Sec.  3.  In  the  absence  or  inability  of  the  president  to  act,  a  vice- 
president,  following  the  order  of  election,  shall  preside. 

Sec.  4.  The  chairman  of  the  executive  committee  shall  preside  at 
all  meetings  of  the  executive  committee;  he  shall  have  power  to  call 
the  committee  together  and  shall  be  the  chief  executive  officer  of  the 
association  for  the  year. 

Sec.  5.  The  secretary  and  general  manager  shall  perform  all  duties 
common  to  that  office,  and  shall  have  supervision  of  all  work  of  the 
association,  and  shall  also  be  an  ex-officio  member  ot  all  committees. 
He  shall  have  custody  of  all  books,  records,  also  the  corporate  seal, 
or  other  property  of  the  association.  He  shall  have  power  to  engage 
and  discharge  all  help  employed  in  the  conduct  of  the  work,  and  shall 
^x  their  compensation  subject  to  the  approval  of  the  executive  com- 
mittee. In  all  matters  requiring  immediate  action  he,  with  the  presi- 
dent and  chairman  of  the  executive  committee,  shall  constitute  an 
advisory  committee,  to  determine  the  course  to  be  taken. 

Sec.  6.  The  treasurer  shall  have  charge  of  all  funds  of  the  associa- 
tion, and  shall  pay  them  out  on  vouchers  made  by  the  secretary  and 
general  manager,  and  shall  make  a  report  on  the  condition  of  funds  at 
each  annual  meeting  or  when  called  upon  by  the  executive  com- 
mittee. The  treasurer  shall  give  bond  in  the  amount  fixed  by  the 
executive  committee,  the  expense  of  obtaining  which  shall  be  paid 
by  the  association. 

Sec.  7.  It  shall  be  the  duty  of  the  executive  committee  to  see  that 
the  objects  of  the  association  are  carried  out  to  the  best  of  their 
ability.  They  shall  have  entire  control  of  and  give  attention  to 
internal  affairs  of  the  association,  and  shall  appoint  the  secretary 
and  general  manager  and  fix  his  compensation,  also  committees  to 
carry  out  the  various  objects  of  the  association,  and  shall  be  at 
liberty  to  place  on  such  committees  members  of  the  association  not 
members  of  the  executive  committee,  and  shall  designate  the  place 
for  the  annual  meeting  unless  othei:wise  directed  by  the  votes  of 
the  association.  They  may  admit  new  members  and  report  the  names 
of  such  members  at  the  next  meeting  of  the  association,  and  they 
shall  have  the  accounts  of  the  treasurer  audited  at  least  once  in  each 
They  shall  also  deal  with  all  resignations  and  withdrawals 


-•       year. 


and  report  results  at  the  next  general  meeting  of  the  association. 

ARTICLE  ni. — selection   OF   OFFICERS. 

Section  1.  The  president,  vice-presidents,  treasurer  and  chairman 
of  the  executive  committee  shall  be  elected  at  the  annual  meeting  of 
the  association  by  the  members  thereof  for  a  period  of  one  year,  and 
the  members  of  the  executive  committee  shall  be  elected  as  follows: 
There  shall  be  elected  at  the  first  meeting  of  the  association  twelve 
members,  four  for  a  period  of  one  year,  four  for  a  period  of  two 
years  and  four  for  a  period  of  three  years,  and  at  each  annual  elec- 
tion after  the  first  election  in  1912  there  shall  be  elected  four  direc- 
tors for  a  period  of  three  years  each. 

Sec.  2.  The  chairman  of  the  executive  committee  shall  hold  his 
office  for  a  period  of  one  year  and  until  his  successor  is  elected  and 
qualified.     Should  the  office  of  chairman  of  this  committee  become 


I'    I' 


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EXHIBITS. 


249 


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I 


vacant  for  any  reason,  the  members  of  the  executive  committee  shall 
have  power  to  elect  one  of  their  number  as  chairman  to  serve  until 
the  next  annual  meeting  of  the  association. 

Sec.  3.  The  secretary  and  general  manager  shall  be  appointed  by 
the  executive  committee. 

Sec.  4.  If  a  vacancy  occurs  in  the  executive  committee  or  in  the 
office  of  treasurer,  the  same  may  be  filled  by  the  executive  committee 
until  the  next  general  election. 

Sec.  5.  At  the  annual  meeting  of  the  association  a  nominating 
committee  of  five  shall  be  selected  by  the  association  to  present  names 
to  be  voted  for  to  fill  the  offices  of  president,  vice-presidents,  treas- 
urer and  members  of  the  executive  committee. 

ABTICLE  IV. — MEETINGS. 

Section  1.  The  annual  meeting  of  the  association  shall  be  held  on 
the  fourth  Tuesday  in  October  each  year,  unless  the  executive  com- 
mittee, for  good  cause,  shall  be  compelled  to  change  the  date. 

Sec.  2.  All  general  meetings  of  the  association  shall  be  held  at 
such  places  as  shall  be  designated  at  a  general  meeting  of  the  asso- 
ciation, but  if  no  place  is  selected  for  the  holding  of  such  meeting,  or 
it  becomes  impracticable  to  hold  such  meeting  at  the  place  designated, 
then  such  general  meeting  shall  be  held  at  such  time  and  place  as  the 
executive  committee  may  designate. 

Sec.  3.  Special  meetings  of  the  association  shall  be  called  by;  the 
president  at  the  request  of  the  executive  conmiittee  or  at  the  written 
i-equest  of  twenty-five  members  of  the  association,  such  call  to  be  in 
writing  and  to  state  the  object  of  such  meeting,  and  a  copy  of  the 
same  to  be  mailed  to  each  member  at  least  ten  days  prior  to  the  date  of 
such  meeting. 

Sec.  4.  At  all  general  meetings  of  the  association,  any  number  of 
members  present  shall  constitute  a  quorum  for  the  transaction  of 
business.  At  any  special  meeting  of  the  association  at  least  twenty- 
five  members  shall  constitute  a  quorum  for  the  transaction  of  business. 

Sec.  5.  Meetings  of  the  executive  committee  may  be  held  upon 
call  of  the  chairman  of  the  executive  committee,  upon  the  secretary 
giving  three  days'  notice  to  the  members  of  such  committee,  stating 
the  object  for  which  said  meeting  is  called. 

Sec,  6.  A  majority  of  the  members  of  the  executive  committee 
shall  constitute  a  quorum  for  the  transaction  of  business. 

article  v. — ^members. 

Section  1.  The  membership  of  the  association  shall  be  divided 
into  three  classes,  viz. :  active  members,  associate  members,  and  hon- 
orary members. 

Sec.  2.  Active  members  of  this  association  shall  consist  of  two 
(«^aosvo . 

Members  of  Oass  I  shall  be  persons,  firms,  and  incorporated  com- 
panies engaged  in  the  manufacture  and  sale  of  agricultural  imple- 
ments, vehicles,  and  lines  allied  thereto  at  wholesale. 

Members  of  Class  II  shall  be  persons,  firms,  incorporated  com- 
panies, branch  houses  or  general  agencies,  not  manufacturers,  en- 
gaged in  the  jobbing,  wholesaling,  or  distribution  of  agricultural 


t 


implements,  vehicles,  or  lines  allied  thereto.  Members  of  this  class 
shall  be  entitled  to  all  privileges  of  members  of  Class  I,  except  that 
they  may  not  vote  at  elections  or  hold  office. 

Sec  3.  Associate  members  of  this  association  shall  be  persons  or 
firms  engaged  in  the  manufacture  and  sale  of  merchandise,  materials, 
or  accessories  used  or  sold  by  the  active  members  but  who  are  not  in 
competition  with  them. 

Sec  4.  The  association  may,  by  vote,  admit  to  honorary  member- 
ship any  person,  who,  from  eminence,  shall  seem  entitled  to  such 
consideration,  and  such  honorary  membership  shall  confer  all  the 
rights  and  privileges  of  active  members  during  life  unless  withdrawn 
for  cause.  But  no  more  than  two  persons  shall  be  admitted  in  any 
one  year. 

Sec  5.  New  members  of  the  association  may  be  admitted  at  any 
time  by  the  executive  committee  in  such  manner  and  form  as  the 
executive  committee  shall  prescribe.  All  resignations  or  withdraw- 
als from  membership  will  be  subject  to  the  action  of  the  executive 
committee. 

ARTICLE  VI. DUES. 

Section  1-A.  Active  Members  of  Class  I.  Each  incorporated  com- 
pany having  a  paid-in  capital  stock  and  surplus  not  exceeding 
$50,000,  each  individual  manufacturer  and  each  incorporated  firm 
engaged  in  manufacturing  agricultural  implements,  vehicles  and 
lines  allied  thereto,  shall,  upon  becoming  a  member,  pay  to  the  asso- 
ciation annual  dues  amounting  to  $25;  those  having  a  capital  and 
surplus  of  more  than 

$50,000  and  less  than  $100,000  shall  pay  $50 
100,000  and  less  than     200,000  shall  pay    75 


200,000  and  less  than 
300,000  and  less  than 
400,000  and  less  than 
500,000  and  less  than 
600,000  and  less  than 
700,000  and  less  than 
800,000  and  less  than 


300,000  shall  pay  100 
400,000  shall  pay  150 
500,000  shall  pay  200 
600,000  shall  pay  250 
700,000  shall  pay  300 
800,000  shall  pay  350 
900,000  shall  pay  400 


li 


900,000  and  less  than  1,000,000  shall  pav  450 
1,000,000  and  less  than  5,000,000  shall  pay  500 
6,000,000  or  over  shall  pay  750 

In  computing  dues  under  the  foregoing  schedule  consideration  will 
be  given  as  to  the  amount  of  capital  and  surplus  employed  in  the 
manufacturing  of  agricultural  implements,  vehicles  and  lines  allied 
thereto,  and  in  event  of  more  than  one-half  of  the  capital  and  surplus 
being  employed  in  the  manufacture  and  sale  of  lines  foreign  to  im- 
plements, vehicles  or  allied  lines  and  going  to  a  different  class  of 
trade,  the  dues  shall  be  computed  on  one-half  of  their  capital  stock 
and  surplus. 

Sec  1-B.  Active  Members  of  Class  II,  consisting  of  persons,  firms, 
incorporated  companies,  branch  houses  or  general  agencies  (not 
manufacturers)  engaged  in  jobbing,  wholesaling  or  distribution  of 
agricultural  implements,  vehicles  or  allied  lines,  shall,  upon  becoming 
a  member,  pay  to  the  association  annual  dues  of  $50.00. 

Sec  2.  Annual  dues  shall  be  payable  in  advance,  one-half  upon 
the  first  day  of  January  and  one-half  on  the  first  day  of  July  of  each 


250 


FAKM-MACHINEEY  TRADE  ASSOCIATIONS. 


EXHIBITS. 


251 


A      I 


year.  Each  active  member  who  shall  join  the  association  at  any  time 
subsequent  to  the  first  day  of  January  in  any  year  shall  pay  to  the 
association  the  amount  of  dues  as  provided  in  section  one  of  this 
article  pro  rata  for  the  unexpired  time,  but  not  less  than  twenty-five 
dollars. 

Sec.  3.  The  executive  committee  shall  have  the  power  to  make  from 
time  to  time  such  special  assessments  against  the  members  of  this 
association  in  addition  to  the  annual  dues  as  may  be  necessary  to  meet 
the  contingent  expenses  of  the  association.  Such  assessments  shall 
be  made  pro  rata  on  the  same  basis  as  fixed  for  dues ;  provided,  that 
the  total  amount  so  assessed  by  the  executive  committee  in  any  one 
year  shall  not  exceed  one-half  the  amount  of  the  annual  dues  paid  by 
the  members,  except  when  directed  to  do  so  by  two-thirds  of  the 
members  present  at  any  meeting  of  the  association. 

Sec.  4.  Associate  Members  will  be  entitled  to  all  social  privileges 
of  the  association  and  to  attend  all  general  meetings  of  the  associa- 
tion, except  those  of  an  executive  character.  This  membership  does 
not  carry  with  it  the  privilege  of  voting.  A  nominal  fee  of  $16.00 
annually,  payable  January  1,  will  be  charged  associate  members. 

Sec.  5.  The  dues  provided  for  in  the  foregoing  sections  of  this 
Article  shall  be  for  tne  year,  and  no  person,  firm  or  corporation  shall 
be  permitted  to  withdraw  so  long  as  any  dues  or  obligations  to  the 
association  remain  outstanding. 

ARTICLE  Vn. — CORFOBATE  SEAL. 

Section  1.  The  corporate  seal  of  this  association  shall  have  en- 
graved thereon  National  Implement  and  Vehicle  Association, 
tJ.  S.  A.,  and  in  the  center  the  word  "  Seal."  It  shall  be  kept  by  the 
secretary  of  the  association,  and  shall  be  affixed  to  all  papers  or 
documents  that  may  be  required  to  be  executed  under  the  corporate 
seal  of  the  association. 

ARTICLE  Vin. — delinquent  MEMBERS. 

Section  1.  A  list  of  members  delinquent  in  the  payment  of  dues 
or  assessments  will  be  presented  by  the  secretary  to  the  executive 
committee  from  time  to  time  for  such  action  as  the  executive  com- 
mittee may  wish  to  take. 

ARTICLE  IX, 

Section  1.  All  resolutions  to  be  presented  to  the  annual  meeting 
of  the  association  must  first  be  submitted  to  the  committee  on  resolu- 
tions. 

ARTICLE  X. 

Section  1.  "Eobert's  Kules  of  Order"  shall  govern  all  such  pro- 
ceedings. 

ARTICLE  XI. 

Section  1.  The  By-Laws  may  be  amended  at  any  meeting  of  the 
association  by  a  majority  vote,  thirty  days'  notice  having  been  given 
the  members  of  the  association  of  such  proposed  amendment,  to- 
gether with  a  copy  of  the  proposed  amendment. 

Sept.  S,  WIS. 


vl  # 


Exhibit  2. 

CONSTITUTION  AND  BY-LAWS  OP  THE  WAGON  DEPARTMENT  OP 
THE  NATIONAL  IMPLEMENT  &  VEHICLE  ASSOCIATION. 

Constitution. 

ARTICLE   1. 

This  organization  shall  be  known  as  the  Wagon  Department  of 
the  National  Implement  and  Vehicle  Association. 

ARTICLE   2. 

■^     The  object  of  this  Department  shall  be  the  promotion  of  the  in- 
terests of  the  wagon  manufacturers. 

ARTICLE  3. 

The  members  of  this  Department  shall  be  persons,  firms  and  cor- 
porations engaged  in  the  manufacture  of  wagons,  also  members  of  the 
National  Implement  and  Vehicle  Association.  Each  firm  or  cor- 
poration shall  be  entitled  to  one  vote  only. 

*  ARTICLE  4. 

Section  1.  The  officers  of  this  Department  shall  be  a  president, 
vice  president,  secretary-treasurer,  all  of  whom  shall  be  elected  at  the 
annual  meeting  to  serve  one  year,  and  shall  perform  the  duties  usually 
assigned  to  such  officers. 

Section  2.  There  shall  be  an  executive  committee  of  five,  com- 
posed of  the  president,  vice  president,  secretary-treasurer,  and  two 
others,  who  shall  be  elected  at  each  annual  meeting  to  serve  for  a 
period  of  one  year.  Said  executive  committee  shall  elect  its  chairman 
from  among  its  own  members. 

Section  3.  The  members  of  the  executive  committee  shall  have 
power  to  fill  any  vacancy  which  may  be  occasioned  by  the  death  or 
resignation  of  any  member  of  that  committee. 

ARTICLE  6. 

This  constitution  may  be  altered  or  amended  at  any  annual  meet- 
ing by  an  affirmative  vote  of  two-thirds  of  the  members  present  at 
such  meeting. 

By-Laws. 

ARTICLE  1. 

The  president  shall  preside  at  the  meetings  of  the  Department ;  in 
his  absence  the  vice  president  shall  preside. 

ARTICLE  2. 

Section  1.  It  shall  be  the  duty  of  the  executive  committee  to  see 
that  the  objects  of  the  Department  are  carried  out  to  the  best  of  its 


MuJd 


FAKM-MACHINERY  TRADE  ASSOCIATIONS. 


/" 


EXHIBITS. 


253 


M 


t  '■ 


ability.  It  shall  have  entire  control  of  and  give  attention  to  in- 
ternal affairs  of  the  Department,  and  shall  appoint  committees  to 
carry  out  the  various  objects  of  the  Department,  and  shall  be  at 
liberty  to  place  on  such  committees,  members  of  the  Department 
who  are  not  members  of  the  executive  committee,  and  shall  designate 
the  place  for  meetings  of  the  Department,  unless  otherwise  directed 
by  the  Department  at  large.  u        * 

Section  2.  The  executive  committee  may  admit  new  members  to 
the  Department  and  report  the  names  of  such  members  at  the  next 
meeting  of  the  Department. 

ABTICLE  3. 

Section  1.  The  regular  annual  meeting  of  the  Department  shall 
be  held  on  the  third  Wednesday  of  November  in  each  year  in  Chicago 
unless  the  executive  committee,  for  good  cause,  should  be  compelled 

to  change  the  date.  .,^        ^        ^t^ni.        ii;i 

Section  2.  Special  meetings  of  the  Department  shall  be  called 
at  the  request  of  the  executive  committee,  or  a  majority  thereof,  or 
at  the  written  request  of  ten  members  of  the  Department,  and  such 
calls  shall  be  in  writing  and  shall  state  the  object  of  the  meeting, 
and  a  copy  of  same  shall  be  mailed  to  each  member  at  least  ten  days 
prior  to  the  date  of  such  meeting. 

ABTICLE  4. 

Section  1.  Each  member  shall,  upon  the  first  day  of  May  of  each 
year,  pay  to  the  Department,  as  annual  dues,  $1. 

Section  2.  The  executive  committee  shall  have  the  power  to  make 
from  tune  to  time,  such  special  assessments  against  the  active  mem- 
bers of  the  Department,  in  addition  to  annual  dues,  as  may  be  neces- 
sary to  meet  the  contingent  expenses  of  the  Department,  provided  such 
assessments  shall  not  exceed  $5  in  any  one  year;  no  other  assess- 
ments shall  be  levied  except  when  the  committee  are  so  directed  to  by 
two-thirds  of  the  members  present  at  any  meeting  of  the  Department. 

ARTICLE  5. 

Section  1.  The  secretary-treasurer  shall  have  charge  of  all  funds 
of  the  Department  and  shall  pay  them  out  on  vouchers  approved  by 
the  chairman  of  the  executive  committee  or  on  order  of  the  executive 
committee,  and  shall  make  a  report  of  the  condition  of  the  funds  in 
his  hands  at  each  annual  meeting  of  the  Department,  and  whenever 
called  upon  to  do  so  by  the  executive  committee.  ,     ,  . , 

Section  2.  The  secretary-treasurer  shall  have  a  record  of  the  pro- 
ceedings of  all  meetings  of  the  Department  and  of  the  executive 
committee,  and  of  all  other  matters  concerning  the  Department,  and 
he  shall  issue  notifications  of  all  meetings  to  each  member  of  the 
Department  and  shall  be  allowed  all  necessary  expenses  approved  by 
the  executive  committee. 

•ARTICLE  6. 

The  Secretary-treasurer  shall  mention  in  his  annual  report  the 
names  of  such  members  as  shall  allow  their  dues  or  assessments  to 


remain  unpaid  for  one  year,  and  all  such  names  shall  be  dropped 
from  the  roll  of  membership. 

ARTICLE    7. 

Robert's  Rules  of  Order  shall  govern  the  meetings  of  this  Depart- 
ment. 

ARTICLE    8. 

These  by-laws  may  be  amended  at  any  annual  meeting  by  a  ma- 
jority of  the  members  present,  provided  five  days'  notice  shall  be 
given  in  advance  of  said  meeting  by  the  secretary-treasurer  to  all 
members  of  the  association,  advising  them  of  the  amendments  to  the 
by-laws  proposed  to  be  made. 


Exhibit  3. 

CONSTITUTION  AND  BY-LAWS  OF  THE  SALES  MANAGERS*  DE- 
PARTMENT OF  THE  NATIONAL  IMPLEMENT  &  VEHICLE  ASSO- 
CIATION. 

(Adopted  February  1,  1912 ;  amended  March  18,  1914.) 

Constitution. 

article  i. 

This  organization  shall  be  known  as  the  Sales  Managers'  Depart- 
ment of  the  National  Implement  and  Vehicle  Association. 

ARTICLE  n. 

The  object  of  this  Department  shall  be  the  promotion  of  the  inter- 
ests of  its  members  and  the  improvement  of  conditions. 

ARTICLE  in. 

The  members  of  this  Department  shall  be  persons  or  concerns  who 
are  active  members  of  the  Association.  The  representation  of  the 
members  at  the  meetings  of  the  Department  shall  be  persons  (not 
traveling  men  or  house  salesmen)  having  charge  of  the  selling  of  the 
product  or  merchandise  handled  by  the  members.  Each  member  or 
house  shall  be  entitled  to  one  vote  only. 

ARTICLE  IV. 

Sec  1.  The  Officers  of  this  Department  shall  be  a  President,  Vice- 
President,  Secretary  Treasurer,  all  of  whom  shall  be  elected  at  the 
Annual  Meeting  to  serve  one  year,  or  until  their  successors  are  elected 
and  qualify,  and  shall  perform  the  duties  usually  assigned  to  such 
officers. 

Sec  2.  There  shall  be  an  Executive  Committee  of  seven,  composed 
of  the  President,  Vice-President,  Secretary-Treasurer  and  four  others, 
who  shall  be  elected  at  each  Annual  Meeting  to  serve  for  a  period  of 
one  year.  The  President  of  the  Department  shall  be  ex-officio  chair- 
man of  the  Executive  Committee. 


FARM-MAOHINEBY  TBADE  ASSOCIATIONS. 


; 


ARTICLE  V. 

This  Constitution  may  be  altered  or  amended  at  any  meeting  by 
an  affirmative  vote  of  two-thirds  of  the  members  present  at  such  meet- 
ing, due  notice  in  writing  having  been  given  each  member  by  the 
Secretary-Treasurer  thirty  dayb  in  advance  of  such  meeting  of 
changes  proposed. 

By-Laws. 

ABnCLB  I. 

The  President  shall  preside  at  the  meetings  of  the  Department;  in 
his  absence,  the  Vice-President  shall  preside. 

ARTICLE  n. 

Sec.  1.  It  shall  be  the  duty  of  the  Executive  Committee  to  see  that 
the  objects  of  the  Department  are  carried  out  to  the  best  of  its  ability. 
It  shall  have  entire  control  and  give  attention  to  the  internal  affairs 
of  the  Department,  and  shall  appoint  committees  to  carry  out  the 
various  objects  of  the  Department,  and  shall  be  at  liberty  to  place  on 
such  committees  members  of  the  Department  who  are  not  members 
of  the  Executive  Committee,  and  shall  designate  the  place  for  meet- 
ings of  the  Department  unless  otherwise  directed  by  the  Department 
at  large;  also,  shall  have  power  to  fill  official  vacancies. 

Sec.  2.  The  Executive  Committee  may  admit  new  members  to  the 
Department  and  report  the  names  of  such  members  at  the  next  meet- 
ing of  the  Department 

ABTICLB  in. 

Sec.  1.  Kegular  annual  meeting  of  the  Department  shall  be  held 
on  the  second  Wednesday  of  October  at  such  place  as  may  be  chosen 
by  the  Executive  Committee.  ^   ,     ^ 

Sec.  2.  There  shall  be  four  regular  meetmgs  of  the  Department, 
to  be  held  on  the  third  Wednesdays  of  January,  March,  June  and 
November  of  each  year. 

Sec.  3.  Special  meetings  of  the  Department  shall  be  called  at  the 
request  of  the  Executive  Committee,  or  upon  the  regular  request  of 
ten  members  of  the  Department,  and  such  calls  shall  be  in  writing, 
and  shall  state  the  object  of  the  meeting,  and  copy  of  same  shall  be 
mailed  to  each  member  at  least  ten  days  prior  to  date  of  such  meeting. 

Sec.  4.  Any  annual  or  regular  meeting  of  the  Department  may  be 
changed  as  to  time  or  place  of  meeting  for  good  cause,  by  the  Exec- 
utive -  Committee. 

ARTICLE  IV. 

Sec.  1.  The  annual  dues  of  the  Department  shall  be  $5.00,  payable 
May  1st  of  each  year.  New  members  as  accepted  shall  pay  at  the 
rate  of  $1.00  for  each  of  the  regular  meetings  scheduled  to  the  follow- 
ing May  1st  dues,  payable  in  advance. 

Sec.  2.  The  Executive  Committee  shall  have  the  power  to  make, 
from  time  to  time,  such  special  assessments  against  the  active  mem- 
bers of  the  Department,  in  addition  to  Annual  Dues,  as  may  be  neces- 
sary to  meet  the  contingent  expenses  of  the  Department,  provided 
such  assessment  shall  not  exceed  $5.00  in  any  one  year;  no  other 


EXHIBITS. 


255 


assessment  shall  be  levied  except  when  the  Committee  is  so  directed 
by  two-thirds  of  the  members  present  at  any  meeting  of  the  Depart- 
ment. 

ARTICLE  V. 

Sec.  1.  The  Secretary-Treasurer  shall  have  charge  of  all  funds  of 
the  Department,  and  shall  pay  them  on  vouchers  approved  by  the 
Chairman  of  the  Executive  Committee,  or  on  order  of  the  Executive 
Committee,  and  shall  make  a  report  of  the  condition  of  the  funds  in 
his  hands  at  each  Annual  Meeting  of  the  Department  and  whenever 
called  upon  to  do  so  by  the  Executive  Committee. 

Sec.  2.  The  Secretary-Treasurer  shall  keep  a  record  of  the  proceed- 
ings of  all  meetings  of  the  Department  and  of  the  Executive  Com- 
mittee, and  of  all  matters  concerning  the  Department,  and  he  shall 
issue  notifications  of  all  meetings  to  each  member  of  the  Department, 
and  shall  be  allowed  all  necessary  expenses  approved  by  the  Exec- 
utive Committee. 

ARTICLE  VI. 

The  Secretary-Treasurer  shall  mention,  in  his  annual  report,  the 
names  of  such  members  as  shall  allow  their  dues  or  assessments  to 
remain  unpaid  for  one  year,  and  all  such  names  shall  be  dropped 
from  the  roll  of  membership. 

ARTICLE  vn. 

Robert's  Rules  of  Order  shall  govern  all  meetings  of  this  Depart- 
ment. 

ARTICLE  vin. 

These  By-Laws  may  be  amended  at  any  meeting  by  a  majority  of 
the  members  present  provided  thirty  days  notice  shall  be  given  in 
advance  of  said  meeting  by  the  Secretary-Treasurer  to  all  members 
of  the  Department,  advising  them  of  the  amendments  of  the  By-Laws 
proposed  to  be  made. 

Exhibit  4. 

LIST  OF  OFFICERS  AND  COMMITTEES  OF  THE  NATIONAL  IMPLE- 
MENT &  VEHICLE  ASSOCIATION,  AS  OF  AUGITST  20,  1914. 

PRESIDENT. 

J.  A.  Craig,  Janesville  Machine  Co.,  Janesville,  Wis. 

VICE  PEESIDENT8. 


W.  B.  Taylor,  Niles  &  Scott  Co.,  La 

Porte,  Ind. 
Wm.    F.    Hoyt,   Dowagiac    Drill    Co., 

Dowagiac,  Mich. 
Wm.  Louden,  Louden  Machinery  Co., 

Fairfield,  la. 

B.  P.  ThornhlU,  Thornhill  Wagon  Co., 
Lynchburg,  Va. 

U.  H.  Brown,  Brown  Mfg.  Co.,  Zanes- 
viUe.  Ohio. 

C.  A.  Pattison,  Peoria  Drill  &  Seeder 
Co.,  Peoria,  IlL 


R.  F.  Roberts,  Randolph  Wagon  Works, 

Randolph,  Wis. 
F.  H.  Delker,  Delker  Bros.  Buggy  Co., 

Henderson,  Ky. 
A.  T.  Stevens,  John  Deere  Plow  Co., 

St.  Louis,  Mo. 
Francis  Farquhar,  A.  B.  Farquhar  Co. 

(Ltd.),  York,  Pa. 
F.  La  Bare,  Owatonna  Mfg.  Co.,  Owa- 

tonna,  Minn. 
F.  N.  Taflf,  Duane  H.  Nash,  Inc.,  Mil- 

lington,  N.  J. 


\ 


I 


256 


FABM-MACHINBEY  TBADE  ASSOCIATIONS. 

glCBBTAKT  AND  OENEBAL  MANAGKB. 

E.  W.  McCuUough,  Cbicago,  111. 

TBKASUBKB. 

H.  N.  Wade.  V.  S.  Wind  Engine  &  Pump  Co.,  Batavla,  HI. 

EXBCUTIVE  COMMITTEB. 


S.  B.  Swayne,  chairman,  Robinson  & 

Co.,  Richmond,  Ind. 
A.  J.  Brosseau,  Gale  Mfg.  CJo.,  Albion, 

Mich 
Joseph  Dam.  Deere  &  ^;,,^''"wArta 
H.  M.  WalUs.  J.  I.  Case  Plow  Works, 

Racine  Wis. 
C  S.  Brantingham,  Emerson-Brantlng- 

ham  Co.,  Rockford,  111. 
F.  E.  Myers,  F.  E.  Myers  &  Bro.,  Ash- 
land, Ohio. 


G.  A.  Ranney,  International  Harvester 

Co.,  Chicago,  111. 
Panl  E.   Herschel,   R.  Herschel  Mfg. 

Co.,  Peoria,  111.  ^     ^     , 

Geo.    R.    James,    James    &    Graham 

Wagon  Co.,  Memphis,  Teun. 
C  S.  Funk,  M.  Rumely  Co.,  Chicago,  111. 
W.   H.   Stackhouse,   French  &  Hecht, 

Springfield,  Ohio. 
A.  B.  McLean,  Roderick  Lean  Mfg.  Co., 

Mansfield,  Ohio. 


STANDING  COMMITTEES. 

Advisoru  committee  {former  presidents). 


H.    M.    Kinney,    chairman,    Winona 

Wagon  Co.,  Whiona,  Minn. 
Wm.  Butterworth,  Deere  &  Co.,  Moline, 

IlL 

F.  C.  Johnson,  American  Seeding  Ma- 
chine Co.,  Springfield,  Ohio. 

E.  D.  Metcalt  International  Harvester 
Co.,  Auburn,  N.  Y. 

Newell  Sanders,  Newell  Sanders  Plow 
Co.,  Chattanooga.  Tenn. 


C.  F.  Huhleln,  B.  F.  Avery  &  SoM, 
Louisville,  Ky.  .  „        *  w 

F.  E.  Myers,  F.  E.  Myers  &  Bro.,  Ash- 
land, Ohio. 

W.  S.  Thomas.  The  Thomas  Mfg.  Co., 
Springfield,  Ohio. 

Jas.  A.  Carr,  American  Seeding  Ma- 
chine Co..  Springfield.  Ohio. 


Agricultural  extension. 


G.  A.  Ranney,  chairman.  International 
Harvester  Co.,  Chicago,  111. 

Jas.  A.  Carr,  vice  chairman,  American 
Seeding  Machine  Co.,  Richmond,  Ind. 

L.  N.  Burns,  J.  I.  Case  Plow  Works, 
Racine.  Wis. 


P.  G.  Holden,  International  Harvester 

Co..  Chicago,  111. 
W.  E.  Taylor,  Deere  &  Co.,  Moline,  111. 


Attorneys  and  litigation. 


C.  S.  Brantingham,  chairman,  Emer- 
son-Bra ntingham  Co..  Rockford,  111. 

Wm.  ,  Butterworth,  vice  chairman, 
Deere  &  Co.,  Molhae,  111. 


A.  Hirshheimer,  La  Crosse  Plow  Co., 

La  Crosse,  Wis. 
Newell  Sanders,  Newell  Sanders  Plow 

Co.,  Chattanooga,  Tenn. 


Credits  and  collections. 


M.  R.  D.  Owings,  chairman,  M.  Rumely 

Co.,  Chicago,  111. 
W.    M.    Onton,   vice   chairman,   Jonn 

Deere  Plow  Co.,  Moline,  111. 
F.  H.  Farnsworth,  Janesvllle  Machine 

Co.,  Janesvllle,  Wis. 
C.  A.  Bines,  Roderick  Lean  Mfg.  U>m 

Mansfield,  Ohio. 


B.  C.    Mosher,    Sandwich    Mfg.    Co., 
Sandwich,  111.  ^    ^ 

J.  K.  Scoggan,  B.  F.  Avery  &  Sons. 
Louisville,  Ky. 

C.  H.   Si)eck,  R.  Herschel  Mfg.   Co., 

Peoria.  111. 


^        f 


«l 


^ 


i 


EXHIBITS. 


Dealers*  ossociationB. 


257 


W.  S.  Thomas,  chairman,  The  Thomas 

Mfg.  Co.,  Springfield,  Ohio. 
A.  J.   Brosseau,  vice  chairman.   Gale 

Mfg.  Co.,  Albion,  Mich. 
Wm.  Black,  B.  F.  Avery  &  Sons,  Louis- 
ville, Ky. 
F.   W.   Burg,   L.   Burg   Carriage  Co., 

Dallas  City,  111. 
L.  N.  Burns,  J.  I.  Case  Plow  Works, 

Racine,  Wis. 
W.  C.  Collins,  Keystone  Steel  &  Wire 

Co.,  Peoria,  111. 
J.  A.  Craig,  Janesvllle  Machine  Co., 

Janesvllle,  Wis. 


W.  I.  Grove,  Mllbum  Wagon  Co.,  To- 
ledo, Ohio. 

J.  H.  Imus,  Ohio  Rake  Co.,  Dayton, 
Ohio. 

H.  M.  Kinney,  Winona  Wagon  Co., 
Winona,  Minn. 

R.  B.  Lourie,  John  Deere  Plow  Co., 
Moline,  111. 

C.  D.  Velie,  Deere  &  Webber  Co.,  Min- 
neapolis, Minn. 

J.  D.  White,  Emersou-Brantingham 
Co.,  Rockford,  IlL 


Foreign  commerce  and  tariff. 


P.  E.  Herschel,  chairman,.  R.  Herschel 

Mfg.  Co.,  Peoria,  111. 
H.  C.  Roberts,  vice  chairman,  Avery 

c\t%     Ppoi*i*i    Til 
M.  M.'  Baker,  Holt  Mfg.  Co.,  Peoria,  111. 
B.  C.  Douglas,  W.  &  B.  Douglas,  Mid- 

dletown.  Conn. 
Francis  Farquhar,  A.  B.  Farquhar  Co. 

(Ltd.),  York,  Pa. 
R.  W.  Geauque,  Flint  &  Walling  Mfg. 

Co.,  Kendallville,  Ind. 


Juan  Homs,  Emerson-Brantingham  Co., 
Rockford,  111. 

F.  C.  Johnson,  American  Seeding  Ma- 
chine Co.,  Springfield,  Ohio. 

Frank  Silloway,  Deere  &  Co.,  Moline, 
111. 

A.  O.  Silver,  Silver  Mfg.  Co.,  Salem, 
Ohio. 

W.  A.  Weed,  Oliver  ChiUed  Plow 
Works,  South  Bend,  Ind. 


Freight  transportation. 


W.  J.  Evans,  chairman,  National  Imp. 

k  Veh.  Assn.,  Chicago. 
O.  F.  Becker,  R.  Herschel  Mfg.  Co., 

Peoria.  111. 
A.  F.  Bowman,  J.  I.  Case  Threshing 

Mach.  Co.,  Racine,  Wis. 
C.    T.    Bradford,    International    Har- 
vester Co.,  Chicago,  111. 
P.    A.    Coapman,    The    Whitman    & 

Barnes  Mfg.  Co.,  Chicago,  111. 
A.  R.  Ebi,  Deere  &  Co.,  Moline.  111. 
R.  D.  Fentress,  La  Crosse  Plow  Co., 

La  Crosse,  Wis. 
R.   E.   Gephart,   A.   B.   Farquhar   Co. 

(Ltd.),  York,  Pa. 
J.  Kanter,  Avery  Co.,  Peoria,  III. 
H.  W.  Klemme,  Jos.  W.  Moon  Buggy 

Co..  St.  Louis.  Mo. 


L.    R.    Martin,    Oliver    Chilled    Plow 

Works,  South  Bend,  Ind. 
J.    H.    Miller,    Emerson-Brantingham 

Co.,  Rockford,  111. 

F.  S.  Pool,  Deere  &  Webber  Co.,  Minne- 
apolis, Minn. 

E.  G.  Schaeffer,  Keystone  Steel  &  Wire 
Co.,  Peoria,  111. 

G.  M.    Sherman,    Studebaker    Corp., 
South  Bend,  Ind. 

N.   Stevenson,   B.   F.  Avery  k   Sons, 

Louisville,  Ky. 
W.   W.   Tallant,   M.   Rumely   Co.,   La 

Porte,  Ind. 
E.  L.  Wratten,  Mitchell-Lewis  Motor 

Co.,  Racine,  Wis. 


Insurance. 


A.  B.  Mclean,  chairman,  Roderick 
Lean  Mfg.  Co.,  Mansfield.  Ohio. 

H.  N.  Wade,  vice  chairman,  U.  S.  Wind 
Engine  &  Pump  Co.,  Batavia,  111. 

J.  S.  Baker,  Baker  Mfg.  Co.,  Evans- 
viUe,  Wis. 

68248*— 15 VI 


Wm.  Butterworth,  Deere  &  Co.,  Mo- 
line, 111. 

E.  C.  Merwin,  The  Russell  &  Co.,  Mas- 
sillon,  Ohio. 

H.  W.  Suydam,  Milburu  Wagon  Co., 
Toledo,  Ohio. 


Ill 


256  FABM-MACHINEBY  TRADE  ASSOCIATIONS. 

8ECBETABT  AND  GENERAL  MANAOEB. 

B.  W.  McCuUougli,  C5hlcago,  DL 

TBEASTJBBB. 

H.  N.  Wade,  U.  S.  Wind  Engine  &  Pump  Co.,  Batavia.  IlL 

EXECUTIVE  COMMITTEE. 


a  E.  Swayne,  chairman,  Robinson  & 
Co.,  Richmond,  Ind. 

A.  J.  Brosseau,  Gale  Mfg.  Co.,  Albion, 
Mich. 

Joseph  Dain,  Deere  &  Co.,  Moline,  111. 

H.  M.  Wallis,  J.  I.  Case  Plow  Works, 
Racine,  Wis. 

C.  S.  Brantingham,  Emerson-Branting- 
ham  Co.,  Rockford,  111. 

F.  E.  Myers,  F.  E.  Myers  &  Bro.,  Ash- 
land, Ohio. 


G.  A.  Banney,  International  Harvester 

Co.,  Chicago,  111. 
Paul   E.   Herschel,   R.   Herschel   Mfg. 

Co.,  Peoria,  111. 
Geo.    R.    James,    James    &    Graham 

Wagon  Co.,  Memphis,  Teun. 
C.  S.  Funk,  M.  Rumely  Co.,  Chicago,  111. 
W.   H.   Stackhouse,   French  &  Hecht, 

Springfield.  Ohio. 
A.  B.  McLean,  Roderick  Lean  Mfg.  Co., 

Mansfield,  Ohio. 


STANDING  COMMITTEES. 

Advisory  committee  (former  presidents). 


H.    M.    Kinney,    chairman,    Winona 

Wagon  Co.,  Winona,  Minn. 
Wm.  Butterworth,  Deere  &  Co.,  Moline, 

lU. 

F.  C.  Johnson,  American  Seeding  Ma- 
chine Co.,  Springfield,  Ohio. 

E.  D.  Metcalf,  International  Harvester 
Co.,  Auburn,  N.  Y. 

Newell  Sanders,  Newell  Sanders  Plow 
Co.,  Chattanooga,  Tenn. 


C.  F.  Huhleln,  B.  F.  Avery  &  Sons. 
Louisville,  Ky. 

F.  E.  Myers,  F.  E  Myers  &  Bro.,  Ash- 
land, Ohio. 

W.  S.  Thomas,  The  Thomas  Mfg.  Co., 
Springfield.  Ohio. 

Jas.  A.  Carr,  American  Seeding  Ma- 
chine Co.,  Springfield,  Ohio. 


Agricultural  eaetension. 


G.  A.  Ranney,  chairman.  International 
Harvester  Co.,  Chicago,  111. 

Jaa  A.  Carr,  vice  chairman,  American 
Seeding  Machine  Co.,  Richmond.  Ind. 

li.  N.  Bums.  J.  I.  Case  Plow  Works, 
Racine,  Wis. 


P.  G.  Holden,  International  Harvester 

Co.,  Chicago,  111. 
W.  E  Taylor,  Deere  &  Co.,  Moline,  111. 


Attorneys  and  litigation. 


C.  S.  Brantingham,  chairman,  Emer- 
son-Bra ntingham  Co.,  Rockford,  111. 

Wm.  Butterworth,  vice  chairman, 
Deere  &  Co.,  Moline,  111. 


A.  Hirshheimer.  La  Crosse  Plow  Co., 

La  Crosse,  Wis. 
Newell  Sanders,  Newell  Sanders  Plow 

Co.,  Chattanooga,  Tenn. 


Credits  and  collections. 


M.  R.  D.  Owings,  chairman,  M.  Rumely 

Co.,  Chicago,  111. 
W.    M.    Onton,    vice   chairman,    John 

Deere  Plow  Co.,  Moline,  111. 
F.  H.  Famsworth,  Janesville  Machine 

Co.,  Janesville,  Wis. 
O.  A.  Hines.  Roderick  Lean  Mfg.  Co., 

Mansfield,  Ohio, 


E.    C.    Mosher,    Sandwich    Mfg.    Co., 

Sandwich.  111. 
J.  K.  Scoggan,  B.  F.  Avery  &  Sons, 

Louisville,  Ky. 
C.  H.   Speck,  R.  Herschel  Mfg.   Co., 

Peoria,  IlL 


/^ 


# 


m 


4Jk 


'if 


EXHIBITS. 


Dealers*  associations. 


257 


W.  S.  Thomas,  chairman.  The  Thomas 

Mfg.  Co.,  Springfield,  Ohio. 
A.  J.  Brosseau,   vice  chairman,   Gale 

Mfg.  Co.,  Albion,  Mich. 
Wm.  Black,  B.  F.  Avery  &  Sons,  Louis- 
ville, Ky. 
F.   W.   Burg,   L.   Burg   Carriage  Co., 

Dallas  City,  III. 
L.  N.  Burns,  J.  I.  Case  Plow  Works, 

Racine,  Wis. 
W.  C.  Collins,  Keystone  Steel  &  Wire 

Co.,  Peoria,  111. 
J.  A.  Craig,  Janesville  Machine  Co., 

Janesville,  Wis. 


W.  I.  Grove,  Mllbum  Wagon  Co.,  To- 
ledo, Ohio. 

J.  H.  Imus,  Ohio  Rake  Co.,  Dayton, 
Ohio. 

H.  M.  Kinney,  Winona  Wagon  Co., 
Winona,  Minn. 

R.  B.  Lourie,  John  Deere  Plow  Co., 
Moline,  111. 

C.  D.  Velie,  Deere  &  Webber  Co.,  Min- 
neapolis, Minn. 

J.  D.  White,  Emerson-Brantlnifham 
Co.,  Rockford,  IlL 


Foreign  comm^erce  and  tariff. 


P.  E.  Herschel,  chairman,.  R.  Herschel 

Mfg.  Co.,  Peoria,  111. 
H.  C.  Roberts,  vice  chairman,  Avery 

CjO     Peoria    111. 
M.  M.'  Baker,  Holt  Mfg.  Co.,  Peoria,  111. 
B.  C.  Douglas,  W.  &  B.  Douglas,  Mid- 

dletown,   Conn. 
B'rancis  Farquhar,  A.  B.  Farquhar  Co. 

(Ltd.),  York,  Pa. 
R.  W.  Geauque,  Flint  &  Walling  Mfg. 

Co.,  Kendallville,  Ind. 


Juan  Horns,  Emerson-Brantlngham  Co., 
Rockford,  111. 

F.  C.  Johnson,  American  Seeding  Ma- 
chine Co.,  Springfield,  Ohio. 

Frank  Silloway,  Deere  &  Co.,  Moline, 
111. 

A.  O.  Silver,  Sliver  Mfg.  Co.,  Salem, 
Ohio. 

W.  A.  Weed,  Oliver  ChUled  Plew 
Works,  South  Bend,  Ind. 


Freight  transportation. 


W.  J.  Evans,  chairman.  National  Imp. 

&  Veh.  Assn.,  Chicago. 
O.  F.  Becker,  R.  Herschel  Mfg.   Co., 

Peoria    111. 
A.  F.  Bowman,  J.  I.  Case  Threshing 

Mach.  Co.,  Racine,  Wis. 
C.    T.    Bradford,    International    Har- 
vester Co.,  Chicago,  111. 
F.    A.    Coapman,    The    Whitman    & 

Barnes  Mfg.  Co.,  Chicago,  111. 
A.  R.  Ebi,  Deere  &  Co.,  Moline,  111. 
R.  D.  Fentress,  La  Crosse  Plow  Co., 

La  Crosse,  Wis. 
R.   E.   Gephart,   A.   B.   Farquhar   Co. 

(Ltd.),  York,  Pa. 
J.  Kanter,  Avery  Co.,  Peoria,  111. 
H.  W.  Klemme,  Jos.  W.  Moon  Buggy 

Co.,  St.  Louis,  Mo. 


L.    R.    Martin,    Oliver    Chilled    Plow 

Works,  South  Bend,  Ind. 
J.    H.    Miller,    Emerson-Brantingham 

Co.,  Rockford,  111. 

F.  S.  Pool,  Deere  &  Webber  Co.,  Minne- 
apolis, Minn. 

E.  G.  Schaeffer,  Keystone  Steel  &  Wire 
Co.,  Peoria,  111. 

G.  M.    Sherman,    Studebaker    CJorp., 
South  Bend,  Ind. 

N.    Stevenson,    B.   F.   Avery   k   Sons, 

Louisville,  Ky. 
W.   W.   Tallant,   M.   Rumely   Co.,   La 

Porte,  Ind. 
E.  L.  Wratten,  Mitchell-Lewis  Motor 

Co.,  Racine,  Wis. 


Insurance. 


A.  B.  Mclean,  chairman,  Roderick 
Lean  Mfg.  Co.,  Mansfield,  Ohio. 

H.  N.  Wade,  vice  chairman,  U.  S.  Wind 
Engine  &  Pump  Co.,  Batavia,  IlL 

J.  S.  Baker,  Baker  Mfg.  Co.,  Evans- 
Yille,  Wis. 

68248°— 15 ^17 


Wm.  Butterworth,  Deere  &  Co.,  Mo- 
line, 111. 

E.  C.  Merwin,  The  Russell  &  Co.,  Mas- 
sillon,  Ohio. 

H.  W.  Suydam,  Milburn  Wagon  Co., 
Toledo,  Ohio. 


11! 


258 


FARM-MACHINERY  TRADE  ASSOCIATIONB. 


Manufacturing  costs. 


Geo.  B.  James,  cliairman,  James  & 
Graham  Wagon  Co.,  Memphla  Tenn. 

Q.  W.  Grampton,  vice  cbairman,  Deere 
ft  Mansur  Co.,  Moline,  111. 

W.  D.  BrintoD,  Intematioiial  Har- 
vester Go.,  Chicago,  HI. 


C.  A.  Geiger,  Troy  Wagon  Works  Co., 

Troy,  Ohio. 
A.    B.    Thlelens,    Studebaker    Corp., 

South  Bend,  Ind. 


Memhershif, 


W,  U.  Myers,  chairman,  F.  B.  Myers  ft 

Bro.,  Ashland,  Ohio. 
0.  A.  Pattlson,  vice  chairman,  Peoria 

Drill  ft  Seeder  Co.,  Peoria,  111. 
B.  S.  Bach,  A.  Buch's  Sons  Co.,  Ellza- 

hethtown.  Pa. 
W.  O.  Collins,  Keystone  Steel  ft  Wire 

Go.,  Peoria,  111. 


P.  B.  Herschel,  B.  Herschel  Mffe.  Co, 

Peoria,  111. 
W.  R.  Lumry,  Associated  Mfrs.  Co., 

Waterloo,  Iowa. 
F.    J.    Vea,    Stoughton    Wagon    Go., 

Stoughton,  Wis. 


Ifational  legislation. 


W.  H.  Stackhonse,  chairman,  French 

ft  Hecht,  Springfield,  Ohio. 
Jas.  A.  Carr,  vice  chairman,  American 

Seeding  Machine  Co.,  Richmond,  Ind. 
Wdl  Bntterworth,  Deere  ft  Co.,  Moline, 

in. 

B.   P.   Gnrtis,   Richardson   Mfg.   Co., 
Worcester,  Mass. 


O.  S.  Funk,  M.  Rumely  Co.,  Chicago,  111. 
C.   F.   Huhlein,  B.   F  Avery  ft  Sons, 

Louisville,  Ky. 
G.  A.  Ranney,  International  Harvester 

Co.,  Chicago,  111. 
Daniel    Seltzer,   Ohio   Cultivator  Co., 

Bellevue,  Ohio. 


Paienit. 


Joseph  Daln,  chairman,  Deere  ft  Co., 
Moline,  HI. 

C.  E.  Lord,  vice  chairman.  Interna- 
tional Harvester  Co.,  Chicago,  111. 

01  W.  Dickinson,  La  Crosse  Plow  Co., 
Lb  Crosse,  Wi& 


P.  A.  Myers,  F.  B.  Myers  ft  Bro.,  Ash- 
land, Ohio. 

B.  B.  Sawyer,  Cushman  Motor  Works, 
Lincoln,  Nebr. 


State  legislation. 


A.  J.  Brosseau,  chairman,  Gale  Mfg. 
Co.,  Albion,  Mich. 

H.  C.  Stahl,  vice  chairman,  Ohio  Culti- 
vator Co.,  Bellevue,  Ohio. 

J.  H.  Anderson,  Anderson  Co.,  St. 
Paul,  Minn. 

F.  J.  Arend,  De  Laval  Separator  Co., 
New  York,  N.  Y. 

P.    N.    Curtis,    Richardson    Mfg.    Co., 

Worcester,  Mass. 
C.  J.  Fulton,  Louden  Machinery  Co., 

Fairfield,  Iowa. 
H.   J.  Hlrshhelmer,  La  Crosse  Plow 

Works,  La  Crosse,  Wis. 

G.  F.  Messinger,  Messinger  Mfg.  Co., 
Tatamy,  Pa. 


W.    M.    Miller,    Miller    Wagon    Co., 

Edina,  Mo. 
Jas.    E.    Rankin,    Henderson    Wagon 

Works,  Henderson,  Ky. 

E.  B.  Sawyer,  Cushman  Motor  Works, 
Lincoln,  Nebr. 

T.  M.   Sechler,   Sechler  Implement  ft 

Carriage  Co.,  Moline,  111. 
W.  C.  Smith,  Vermont  Farm  Machine 

Co.,  Bellows  Falls,  Vt 

F.  N,   Taflf,   Duane  H.   Nash    (Inc.), 
Millington,  N.  J. 

W.  E.  Taylor,  NUes  ft  Scott  Co.,  La 
Porte,  Ind. 


Workmen*s  accident  compensation. 


G.  L.  ATery,  chairman,  Avery  Co., 
Peoria,  111. 

W.  H.  Stackhonse,  vice  chairman, 
French  &  Hecht,  Springfield,  Ohio. 

J.  E.  Brown,  Aultman  &  Taylor  Ma- 
chinery Co.,  Mansfield,  Ohio. 


Jas.  A.  Carr,  American  Seeding  Ma- 
chine Co.,  Richmond,  Ind. 
G.  W.  Mixter,  Deere  ft  Co.,  Moline,  lU. 


EXHIBITS. 


Exhibit  6. 


259 


LIST   OF  MEMBEBS   OF   THE   NATIONAL  IMPLEMENT   &  VEHICLE 
ASSOCIATION,    AS   OF   AUGUST   20,    1914. 

ACTIVE  MEMBERS  OF  CLASS   1. 


Abingdon  Wagon  Co.,  Abingdon,  111. 

Acme  Wagon  Co.,  Emigsville,  Pa. 

American  Potato  Machinery  Co.,  Ham- 
mond, lud. 

American  Seeding  Machine  Co.,  Spring- 
field, Ohio. 

Anderson  Co.,  St.  Paul,  Minn. 

Ann  Arbor  Machine  Co.,  Ann  Arbor, 
Mich. 

Appleton  Mfg.  Co.,  Batavia,  111. 

Aspinwall  Mfg.  Co.,  Jackson,  Mich. 

Associated  Manufacturers'  Co.,  Water-, 
loo,  Iowa. 

Auburn  Wagon  Co.,  The,  Martinsburg, 
W.  Va. 

Aultman  &  Taylor  Machinery  Co.,  The, 
Mansfield,  Ohio. 

Avery  Co.,  Peoria,  111. 

Avery  ft  Sons,  B.  F.,  Louisville,  Ky. 

Bailor  Plow  Mfg.  Co.,  Atchison,  Kans. 

Bain  Wagon  Co.,  Kenosha,  Wis. 

Baker  Co.,  The  A.  D.,  Swanton,  Ohio. 

Baker  Mfg.  Co.,  Evansvllle,  Wis. 

Bateman  Mfg.  Co.,  Grenloch,  N.  J. 

Bauer  Bros.  Co.,  The,  Springfield,  Ohio. 

Blount  Plow  Works,  Evansvllle,  Ind. 

Bowsher  Co.,  The  N.  P.,  South  Bend, 

Ind. 

Brown  Mfg.  Co.,  The,  Zanesvilie,  Ohio. 

Buch's  Sons  Co.,  A.,  Elizabethtown,  Pa. 

Burg  Carriage  Co.,  L.,  Dallas  City,  III. 

Case  Plow  Works,  J.  I.,  Racine,  Wis. 

Case  Threshing  Machine  Co.,  J.  I., 
Racine,  Wis. 

Challenge  Co.,  Batavia,  111. 

Champion  Potato  Machinery  Co.,  Ham- 
mond, Ind. 

Clark  Carriage  Co.,  J.  L.,  Oshkosh,  Wis. 

Columbia  Wagon  Co.,  Columbia,  Pa. 

Columbiana    Pump    Co.,    Columbiana, 

Ohio. 
Cushman  Motor  Works,  Lincoln,  Nebr. 
Daln  Mfg.  Co.,  Ottumwa,  Iowa. 
Deal  Buggy  Co.,  The,  Jonesvllle,  Mich. 
Deere  &  Co.,  Moline,  111. 
Deere  &  Mansur  Co.,  Moline,  III. 
De  Laval  Separator  Co.,  New  York, 

N.  Y. 
Delker  Bros.   Buggy  Co.,   Henderson, 

Ky. 
Demlng  Co.,  The,  Salem,  Ohio. 
Dempster  Mill  Mfg.  Co.,  Beatrice,  Nebr. 
Douglas,  W.  ft  B.,  Mlddletown,  Conn. 
Dowagiac  Drill  Co.,  Dowaglac,  Mich. 
Dunham  Co.,  The,  Berea,  Ohio. 
Eckhart  Carriage  Co.,  Auburn,  Ind. 
Eddy  Plow  Co.,  W.,  Greenwich,  N.  Y. 
Emerson-Brantingham   Co.,   Rockford, 


Empire  Plow  Co.,  Cleveland,  Ohio. 
Eureka  Mower  Co.,  Utlca,  N.  Y. 
Farquhar  Co.  (Ltd.),  The  A.  B.,  York, 

Pa. 
Flint  &  Walling  Mfg.  Co.,  KendaUvllle, 

Ind. 
Florence  Wagon  Co.,  Florence,  Ala. 
Foos  Gas  Engine  Co.,  The,  Springfield, 

Ohio. 
French  &  Hecht,  Davenport,  Iowa. 
Gale-Hooper  Co.,  Memphis,  Tenn. 
Gale  Mfg.  Co.,  Albion,  Mich. 
Gay  Co.,  S.  G.,  Ottawa,  111. 
Gehl  Bros.  Mfg.  Co.,  West  Bend,  Wis. 
Geneva  Metal  Wheel  Co.,  Geneva,  Ohio. 
Hart  Grain  Weigher  Co.,  Peoria,  III. 
Hartman  Mfg.  Co.,  Vincennes,  Ind. 
Havana  Metal  Wheel  Co.,  Havana,  III. 
Henderson  Wagon  Works,  Henderson, 

Henry  &  Allen,  Auburn,  N.  Y. 

Herschel  Mfg.  Co.,  R.,  Peoria,  Hi. 

Holt  Mfg.  Co.,  The,  Peoria,  III. 

Hoover  Mfg.  Co.,  The,  Avery,  Ohio. 

Huber  Mfg.  Co.,  Marlon,  Ohio. 

Indiana  Wagon  Co.,  Lafayette,  Ind. 

International  Harvester  Co.,  Chicago, 
III. 

James  Mfg.  Co.,  Fort  Atkinson,  Wis. 

James  &  Graham  Wagon  Co.,  Mem- 
phis, Tenn. 

Jauesville  Machine  Co.,  The,  Janesvllle 
Wis. 

Johnson  &  Field  Mfg.  Co.,  Racine,  Wis. 

Joliet  Mfg.  Co.,  Joliet,  HI. 

Kentucky  Wagon  Mfg.  Co.,  Louisville, 
Ky. 

Keystone  Steel  &  Wire  Co.,  Peoria,  lU. 

King  &  Hamilton  Co.,  Ottawa,  III. 

La  Crosse  Plow  Co.,  La  Crosse,  Wis. 

Lansing  Co.,  Lansing,  Mich. 

Lauson  Mfg.  Co.,  The  John,  New  Hol- 
steln,  Wis. 

Lean  Mfg.  Co.,  Roderick,  Mansfield, 
Ohio. 

Letz  Mfg.  Co.,  Crown  Point,  Ind. 

Little  Metal  Wheel  Co.,  J.  R.,  Qunlcy, 

111. 
Louden  Machinery  Co.,  Fairfield,  Iowa. 
McClure  Co.,  The,  Saginaw,  Mich. 
Madison  Plow  Co.,  Madison,  Wis 
Mast,  Foos  &  Co.,  Springfield,  Ohio. 
Maytag  Co.,  The,  Newton,  Iowa. 
Messinger  Mfg.  Co.,  Tatamy,  Pa. 
Mllburn  Wagon  Co.,  The,  Toledo,  Ohio. 
Miller  Wagon  Co ,  Edina.  Mo. 
Minnetonna  Co.,  The,  Owatonna,  Minn. 
Mitchell  Wagon  Co.,  Racine,  Wis. 


260 


FAKM-MACHINEBY  TBADE  ASSOCIATIONS. 


EXHIBITS. 


261 


il 


Moon  Buggy  Ck>.,  Joa  W.,  St  Louis,  Mo. 
Moon  Bros.   Carriage  Co.,  St  Louis, 

Ma 
Moore  Co.,  The  Given,  Spring  Valley, 

HL 
Moyer  Mfg.  Co.,  Montevideo,  Minn. 
Myers  &  Bro.,  F.  E.,  Ashland,  Ohio. 
Nash,    Dnane   H.    (Inc.),    Millington, 

N.  J. 
•*  New  Way  "  Motor  Co.,  The,  Lansing, 

Mich. 
Nlles  &  Scott  Co.,  La  Porte,  Ind. 
Northwestern  Mfg.  Co.,  Fort  Atkinson, 

Wis. 
Ohio    Cultivator   Co.,   The,   Bellevue, 

Ohio. 
Ohio  Mfg.  Co.,  The,  Upper  Sandusky, 

Ohio. 
Ohio  Rake  Co.,  Dayton,  Ohio. 
Oliver    Chilled    Plow    Works,    South 

Bend,  Ind. 
Owatonna  Mfg.  Co.,  Owatonna,  Minn. 
Pattee  Plow  Co.,  Monmouth,  111. 
Pekln  Wagon  Co.,  Pekin,  111. 
Peoria  Drill  &  Seeder  Co.,  Peoria,  111. 
Perkins  Windmill  Co.,  Mishawaka,  Ind. 
Peru  Plow  &  Wheel  Co.,  Peru,  111. 
Porter  Co.,  J.  E.,  Ottawa,  111. 
Randolph    Wagon    Works,    Randolph, 

Wis. 
Richardson  Mfg.  Co..  The,  Worcester, 

Mass. 
Robinson  &  Co.,  Richmond,  Ind. 
Ross  Co.,  The  E.  W.,  Springfield,  Ohio. 
Rowe  Mfg.  Co.,  Galesburg,  111. 
Rumely  Co.,  M.,  La  Porte,  Ind. 
Russell  &  Co.,  The,  Massillon,  Ohio. 
St  Marys  Machine  Co.,  St.  M;irys,  Ohio. 
Sanders    Plow    Co.,    Newell,    Chatta- 
nooga, Tenn. 
Sandwich  Mfg.  Co.,  Sandwich.  III. 
Schuttler  Co.,  Peter,  Chicago,  111. 
Sechler   Implement   k    Carriage    Co., 

D.  M..  Moline,  111. 


Sheffield  Mfg.  Co.,  Burr  Oak,  Mich. 
Silver  Mfg.  Co.,  Salem,  Ohio. 
Smalley  Mfg.  Co.,  Manitowoc,  W1& 
Star  Drilling  Machine  Co.,  The,  Akron, 

Ohio. 
Sterling  Mfg.  Co.,  Sterling,  111. 
Stoughton  Wagon  Co.,  The,  Stoughton, 

Wis. 
Studebaker  Corp.,  South  Bend,  Ind. 
Superior  Hay  Stacker  Mfg.  Co.,  Lin- 

neus.  Mo. 
Sweet  Co.,  B.  F.  ft  H.  L.,  Fond  du 

Lac,  Wis. 
Thomas    Mfg.    Co.,    The,    Springfield, 

Ohio. 
Thornhill    Wagon    Co.,    The.    Lynch- 
burg, Va. 
Tiger  Drill  Mfg.  Co.,  Beaver  Dam, Wis. 
Tower  &  Sons  Co.,  The  J.  D.,  Men- 

dota.  111. 
Troy   Wagon  Works  Co.,  The,  Troy, 

Ohio. 
TurubuU   Wagon   Co.,   The,   Defiance, 

Ohio. 
Tumey  &  Co.,  Joel,  Fairfield,  Iowa. 
U.  S.  Wind,  Engine  &  Pump  Co.,  Ba- 

tavia.  111. 
Van  Brunt  Mfg.  Co.,  Horicon,  Wis. 
Velie  Carriage  Co.,  Moline,  111. 
Vermont  Farm  Machine  Co.,  Bellows 

Falls,  Vt 
Western  Wheeled  Scraper  Co.,  Aurora, 

111. 
White  Buggy  Co.,  Geo.,  Rock  Island, 

111. 
Whitman  Agricultural  Co.,  St.  Louis, 

Mo. 
Whitman    ft    Barnes    Mfg.    Co.,    The, 

Akron,  Ohio. 
Wilder   Strong   Implement   Co.,   Mon- 
roe, Mich. 
Winona  Wagon  Co.,  Winona,  Minn. 
Wisconsin    Carriage    Co.,    JanesviUe, 

Wia 


ACTIVE  MEMBEBS  OF  CLASS  2. 


Deere  Plow  Co.,  John,  Omaha,  Nebr. 
Deere  Plow  Co.,  The  John,  St.  I^iouis, 

Mo. 
Deere  Plow  Co.,  John,   Indianapolis, 

Ind. 
Deere  Plow  Co.,  John,  Kansas  City, 

Mo. 


Deere    &    Webber    Co.,    Minneapolis, 

Mimi. 
Hudson  &  Thurber  Co.,  Minneapolis, 

Minn. 
Sharpies  Separator  Co.,  Chicago,  111. 


ASSOCIATE   MEMBERS. 


Acme  White  Lead  &  Color  Works,  De- 
troit, Mich. 

Alston-Lucas  Paint  Co.,  Chicago,  111. 

American  Chain  Co.,  Bridgeport,  Conn. 

American  Screw  Co.,  Providence,  R.  I. 

Amencan  Sheet  &  Tin  Plate  Co ,  Pitts- 
burgh, Pa. 

American  Steel  &  Wire  Co.,  Chicago, 
HI. 


American  Varnish  Co.,  Chicago,  HI. 
Baeder,  Adamson  &  Co.,  Chicago,  111. 
Belle  City  Malleable  Iron  Co.,  Racine, 

Wis. 
Berry  Bros.  (Ltd.),  Detroit,  Mich. 
Big  Creek  Colliery  Co.,  Chicago,  111. 
Brown  &  Co.  (Inc.),  Pittsburg,  Pa. 
Calumet  Steel  (3o.,  Chicago,  111. 
Cambria  Steel  Co.,  Chicago,  HL 


/ 


Canadian  Implement  Trade,  The,  To- 
ronto, Ontario.  • 

Carborundum  Co.,  The,  Niagara  Falls, 
N.  Y. 

Carnegie  Steel  Ck).,  Pittsburg,  Pa. 

Castle  &  Co.,  A.  M.,  Chicago,  111. 

Chain  Belt  Co.,  Milwaukee,  Wis. 

Chicago  Malleable  Castings  Co.,  West 
Pullman,  111. 

Chicago  Varnish  Co.,  Chicago,  111. 

Clark  Bros.  Bolt  Co.,  Milldale,  Ck)nn. 

Cleveland  Punch  &  Shear  Works  Co., 
The,  Cleveland,  Ohio. 

Cleveland   Steel  Tool   Co.,   Cleveland, 
Ohio. 

Cleveland  Wire  Spring  Co.,  The,  Cleve- 
land, Ohio. 

Colonial  Steel  Co.,  Pittsburg,  Pa. 

Continental  Bolt  &  Iron  Works,  Chi- 
cago, HI. 

Cortland  Welding  Compound  Ck).,  Cort- 
land, N.  Y. 

Cowin,  Frederick  &  Co.,  Chicago,  111. 

Crucible  Steel  Co.  of  America,  Pitts- 
burgh, Pa. 

Detroit  Seamless  Steel  Tubes  Co.,  De- 
troit, Mich. 

Detroit  White  Lead  Works,   Detroit, 
Mich. 

Devoe  &  Raynolds  Ck).,  Chicago,  111. 

Dodge  Mfg.  Co.,  Mishawaka,  Ind. 

Domhoff  &  Joyce  Co.,  Chicago,  IlL 

£2dson  Bros.,  Washington,  D.  C. 

Farm  Implement  News  Co.,  Chicago, 
111. 

Farm  Implement  Publishing  Co.,  Min- 
neapolis, Minn. 

Farm  Machinery,  St  Louis,  Mo. 

Garland  Nut  &  Rivet  Co.,  Pittsburgh, 
Pa. 

Gerts  Lumbard  Co.,  Chicago,  111. 

Gibson,  Wm.  D.,  Co.,  Chicago,  111. 

Glidden  Varnish  Co.,  Cleveland,  Ohio. 

Graham  Nut  Co.,  Pittsburgh,  Pa. 

Graton  &  Knight  Mfg.  Co.,  Worcester, 
Mass. 

Halcomb  Steel  Co.,  Chicago,  HI. 

Hanna  &  Co.,  M.  A.,  Detroit,  Mich. 

Harrow  Spring  Ck).,  Kalamazoo,  Mich. 

Heath  &  Milligan  Mfg.  Co.,  Chicago,  111. 

Higgins   Spring  &  Axle   Co.,   Racine, 
Wla 

Highland  Iron  &  Steel  Co.,  The,  Terre 
Haute,  Ind. 

Illinois  Steel  Co.,  Chicago,  111. 

Implement  Age  Co.,  The,  Springfield, 
Ohio. 

Implement  Trade  Journal  Co.,  Kansas 
City,  Mo. 

Inland  Steel  Co.,  CMcago,  111. 

Interstate  Iron  &  Steel  Co.,  Chicago,  HI. 

Jackman  &  Co.,  B.  S.,  Chicago,  111. 

Jones  &  Laughlin  Steel  Co.,  Pittsburgh, 
Pa. 

Kirk-Latty  Co.,  Steubenville,  Ohio. 

La    Belle   Iron   Works,    Steubenville, 
Ohio. 


Lackawanna  Steel  Co.,  Chicago,  111. 

Ladew,  Estate  of  Edw.  R.,  Glen  Cove, 
Long  Island,  N.  Y. 

Lake  Erie  Iron  Co.,  Cleveland,  Ohio. 

Link  Belt  Co.,  Chicago,  111. 

Louisiana  Lumber  Co.,  Cairo,  111. 

Lucas  &  Co.,  John,  Philadelphia,  Pa. 

Luehrmann,  Chas.  F.,  Hardwood  Lum- 
ber Co.,  St.  Louis,  Mo. 

Michigan  Bolt  &  Nut  Works,  Detroit, 
Mich. 

Michigan  Sprocket  Chain  Co.,  Detroit, 
Mich. 

Moline  Malleable  Iron  Co.,  St.  Charles, 
111. 

Moline  Paint  Mfg.  Co.,  Moline,  111. 

Morris,  I.  R.,  Chicago,  111. 

Mound   City   Paint  &  Color  Co.,   St 
Louis,  Mo. 

Mutual  Wheel  Co.,  Moline,  111. 

National  Lead  Co.,  Chicago,  111. 

National  Malleable  Castings  Co.,  Chi- 
cago, 111. 

National  Tube  Co.,  Chicago,  111. 

Northwestern  Malleable  Iron  Co.,  Mil- 
waukee, Wis, 

Norton  Co.,  Chicago,  111. 

O'Brien  Varnish  Co.,  South  Bend,  Ind. 

Ohio   Malleable   Iron   Co.,   Columbus, 
Ohio. 

Oliver  Iron  &  Steel  Co.,  Pittsburgh,  Pa. 

Oliver  Typewriter  Co.,  Chicago,  111. 

Perfection  Spring  Co.,  Cleveland,  Ohio. 

Pickands,  Brown  &  Co.,  Chicago,  111. 

Pratt  &  Lambert  (Inc.),  Chicago,  111. 

Queen   City   Varnish   Co.,   Cincinnati, 
Ohio. 

Racine  Lumber  &  Mfg.   Co.,   Rachie, 
Wis. 

Rand-McNally  Co.,  Chicago,  HI. 

Reeves  Pulley  Co.,  Columbus,  Ind. 

Reilly  &  Son,  P.,  Newark,  N.  J. 

Republic  Iron  &  Steel  (30.,  Pittsburgh, 
Pa. 

Rogers,  Brown  &  Co.,  Chicago,  111. 

Russell,  Burdsall  &  Ward  Bolt  &  Nut 
Co..  Port  Chester,  N.  Y. 

Ryerson  &  Son,  Jos.  T.,  Chicago,  HI. 

Safety  Emery  Wheel  Ck).,  The,  Spring- 
field, Ohio. 

Salisbury  &  Co.,  W.  H.,  Chicago,  111. 

Scully  Steel  &  Iron  Co.,  Chicago,  111. 

Shadbolt  &  Boyd  Iron  Co.,  Milwaukee, 
Wis. 

Sharon  Steel  Hoop  Co.,  Sharon,  Pa. 

Shepard  Co.,  The  Henry  O.,  Chicago, 
HI. 

Sherwin-Williams   (3o.,   The,   Chicago, 
IlL 

Standard  Chain  Co.,  Pittsburgh,  Pa. 

Standard   Tool    Co.,   The,    Cleveland, 

Ohio. 
Standard  Varnish  Works,  Chicago,  111. 

Tousey  Varnish  Co.,  Chicago,  111. 

Townsend  Co.,  C.  C.   &  E.   P.,  New 

Brighton,  Pa. 
Transue  &  Williams,  Alliance,  Ohio. 


262 


FABM-MACHINEBY  TRADE  ASSOCIATIONS. 


L'nion  Drawer  Steel  Co..  Beaver  Falls, 

Pa. 
U.  8.  Pressed  Steel  C5o.,  Ypsilanti,  Mich. 
Universal    Rolling   Mill    Ck).,    Bridge- 

ville,  Pa. 
Upson  Nut  Co.,  The,  Cleveland,  Ohio. 
Warren  Iron  &  Steel  Co.,  Warren,  Ohio. 
Western  roondry  Co.,  The,  Chicago,  111. 


Whitaker  Mfg.  Co.,  The,  Chicago,  IlL 

Whiting  Foundry  Equipment  Co.,  Har- 
vey  111. 

Williams,*  White  &  Co.,  Moline,  111. 

Wisconsin  Steel  Co.,  Chicago,  111. 

Youngstown  Iron  &  Steel  Co.,  Youngs- 
town,  Ohio. 


Exhibit  6. 
list  of  membebs  of  the  fabm  wagon  depabtment  of  the 

NATIONAIi  IMPLEMENT   ft  VEHICLE   ASSOCIATION,   AS   OF   AU- 
GUST 20,  1014. 


Abingdon  Wagon  Co.,  Abingdon,  111. 

Acme  Wagon  Co.,  Emlgsville,  Pa. 

Auburn  Wagon  Co.,  Martinsburg,  W.  Va. 

Bain  Wagon  Co.,  Kenosha,  Wis. 

Brown  Mfg.  Co.,  Zanesville,  Ohio. 

Columbia  Wagon  Co.,  Columbia,  Pa. 

John  Deere  Wagon  Co.  (Deere  &  Co.), 
Moline,  111. 

Emerson-Brantlngham  Co.,  Bockford, 
HI. 

Henderson  Wagon  Works,  Henderson, 
Ky. 

Indiana  Wagon  Co.,  La  Fayette,  Ind. 

International  Harvester  Co.,  Chicago, 
111. 

James  &  Graham  Wagon  Co.,  Mem- 
phis, Tenn. 

Kentuctcy  Wagon  Mfg.  Co.,  Louisville, 
Ky. 


Mllbum  Wagon  Co.,  Toledo,  Ohio. 
Miller  Wagon  Co.,  Edina,  Mo. 
Mitchell  Wagon  Co.,  Racine,  Wis. 
Northwestern  Mfg.  Co.,  Fort  Atkinson, 

Wis. 
Pekin  Wagon  Co.,  Pekin,  111. 
Randolph    Wagon    Works,    Randolph, 

Wis. 
Schnttler  Co.,  Peter,  Chicago.  111. 
Stoughton  Wagon  Co.,  Stoughton,  Wis. 
Studebaker  Corp.,  South  Bend,  Ind. 
Sweet  Co.,  B.  F.  &  H.  L.,  Fond  du  Lac, 

Wis. 
Thornhill  Wagon  Co.,  Lynchburg,  Va. 
Troy  Wagon  Co.,  Troy,  Ohio. 
Tumbull  Wagon  Co.,  Defiance,  Ohio. 
Tumey  &  Co.,  Joel,  Fairfield,  Iowa. 
Winona  Wagon  Co.,  Winona,  Minn. 


Exhibit  7. 

LIST  OF  MEMBEBS  OF  THE  PLOW  AND  TILLAGE  IMPLEMENT 
BEPABTMENT  OF  THE  NATIONAL  IMPLEMENT  &  VEHICLE  AS- 
SOCIATION, AS  OF  AUGUST  20,  1914. 


American  Seeding  Machine  Co.,  Spring- 
field, Ohio. 

Avery  &  Sons,  B.  F.,  Louisville,  Ky. 

Bailor  Plow  Mfg.  Co.,  Atchison,  Kan& 

Brown  Mfg.  Co.,  Zanesville,  Ohio. 

Case  Plow  Works,  J.  I.,  Racine,  Wis. 

Deere  &  Co.,  Moline,  111. 

De<^re  &  Mansur  Co.,  Moline.  HI. 

Dempster  Mill  Mfg.  Co.,  Beatrice, 
Nebr.    * 

Eddy  Plow  Co.,  W.,  Greenwich,  N.  Y. 

Emerson-Brantingham  Co.,  Rockford, 
111. 

Empire  Plow  Co.,  Cleveland,  Ohio. 

Farquhar  Co.  (Ltd.),  A.  B.,  York.  Pa. 

Gale  Mfg.  Co.,  Albion,  Mich. 

Hartman  Mfg.  Co.,  Vincennes,  Ind. 

International  Harvester  Co.,  Chicago, 
DL 

Janeietville  Machine  Co.,  Janesville, 
Wia 


La  Crosse  Plow  Co.,  La  Crosse,  Wis. 

Lean  Mfg.  Co.,  Roderick,  Mansfield, 
Ohio. 

Messinger  Mfg.  Co.,  Tatamy,  Pa. 

Nash  (Inc.),  Duane  H.,  Millington, 
N.  J. 

Ohio  Rake  Co.,  Dayton,  Ohio. 

Oliver  Chilled  Plow  Co.,  South  Bend, 
Ind. 

Pattee  Plow  Co.,  Monmouth,  111. 

Peru  Plow  ft  Wheel  Ck).,  Peru,  111. 

Rumely  Company,  M.,  CJhlcago,  111. 

Sechler  Implement  &  CJarriage  Co.,  D. 
M.,  Moline,  111. 

Sterling  Mfg.  Co.,  Sterling  111. 

Sanders  Plow  CJo.,  Newell,  Chatta- 
nooga, Tenn. 

Tower  &  Sons  <j0.»  J.  D.,  Mendota,  Hi. 


EXHIBITS. 


Exhibit  8. 


263 


LIST  OF  MEMBEBS  OF  THE  GBAIN  DRILL  AND  SEEDER  DEPABT- 
MENT OF  THE  NATIONAL  IMPLEMENT  &  VEHICLE  ASSOCIATION, 
AS  OF  AUGUST  20,  1914. 


American  Seeding  Machine  Co.,  Spring- 
field, Ohio. 

Deere  &  Co.,  Moline,  111. 

Dempster  Mill  Mfg.  Co.,  Beatrice,  Nebr. 

Dowagiac  Drill  Co.,  Dowagiae,  Mich. 

Emersou-Brantingham  Ck).,  Rockford, 
111. 

Farquhar  Co.  (Ltd.),  A.  B.,  York,  Pa. 

International  Harvester  Co.,  Chicago, 
lU. 


La  Crosse  Plow  Co.,  La  Crosse,  Wis. 
Owatonna  Mfg.  Co.,  Owatonna,  Minn. 
Peoria  Drill  &  Seeder  Co.,  Peoria,  lU. 
Sterling  Mfg.  Co.,  Sterling,  111. 
Thomas  Mfg.  Co.,  Springfield,  Ohio. 
Tiger  Drill  Mfg.  Co.,  Beaver  Dam,  Wis. 
Van  Brunt  Mfg.  Co.,  Horicon,  Wis. 


Exhibit  9. 

LIST  OF  MEMBERS  OF  THE  SALES  MANAGERS'  DEPARTMENT  OF 
THE  NATIONAL  IMPLEMENT  &  VEHICLE  ASSOCIATION,  AS  OF 
AUGUST  20,  1914. 


American  Potato  Machinery  Co.,  Ham- 
mond, Ind. 

American  Seeding  Machine  Co.,  Spring- 
field, Ohio. 

Ann  Arbor  Machine  Co.,  Ann  Arbor, 
Mich. 

Appleton  Mfg.  Ck).,  Batavia,  111. 

Aspinwall  Mfg.  Ck).,  Jackson,  Mich. 

Avery  Co.,  Peoria,  111. 

Avery  &  Sons,  B.  F.,  Louisville,  Ky. 

Baker  Mfg.  Co.,  Evansville,  Wis. 

Bateman  Mfg.  Co.,  Grenloch,  N.  J. 

Bauer  Bros.  Co.,  Springfield,  Ohio. 

Blount  Plow  Works,  Evansville,  Ind. 

Brown  Mfg.  Co.,  Zanesville,  Ohio. 

Buch's  Sons  Co.,  A.,  Elizabethtown,  Pa. 

Case  Plow  Works,  J.  I.,  Racine,  Wis. 

Champion  Potato  Machinery  Co.,  Ham- 
mond, Ind. 

Cushman  Motor  Works,  Lincoln,  Nebr. 

Deere  &  Co.,  Moline,  111. 

Deere  Plow  Co.,  John,  Moline,  111. 

De  Laval  Separator  Co.,  Chicago,  111. 

Dempster  Mill  Mfg.  Ck).,  Beatrice,  Nebr. 

Dowagiac  Drill  Co.,  Dowagiac,  Mich. 

Douglas,  W.  &  B.,  Middletown,  Conn. 

Eckhart  Carriage  Co.,  Auburn,  Ind. 

Emerson-Bra ntingham   Ck).,    Rockford, 

111. 

Farquhar  Ck).  (Ltd.),  A.  B.,  York,  Pa. 

Flint  &  Walling  Mfg.  Co.,  Kendallville, 
Ind. 

Gale  Mfg.  Co.,  Albion,  Mich. 

Gehl  Bros.  Mfg.  Co.,  West  Bend,  Wis. 

Geneva  Metal  Wheel  Co.,  Geneva,  Ohio. 

Hartman  Mfg.  Ck).,  Vincennes,  Ind. 

Herschel  Mfg.  Co.,  R.,  Peoria,  111. 

International  Harvester  Co.,  Chi- 
cago, 111. 

James  Mfg.  Ck).,  Fort  Atkinson,  Wis. 

Janesville  Machine  Co.,  Janesville, 
Wis. 

Johnson  &  Field  Mfg.  Co.,  Racine,  Wis. 

La  Crosse  Plow  Ck).,  La  Crosse,  Wis. 

Lauson  Mfg.  Co.,  J.,  New  Holsteln,  Wis. 


Little  Metal  Wheel  Co.,  J.  R.,  Quincy, 

111. 
Louden  Machinery  Co.,  Fairfield,  Iowa. 
Madison  Plow  Co.,  Madison,  Wis. 
McClure  Co.,  The,  Saginaw,  Mich. 
Mast,  Foos  &  Co.,  Springfield,  Ohio. 
Maytag  Co.,  The,  Newton,  Iowa. 
Milbum  Wagon  Co.,  Toledo,  Ohio. 
Minnetonna  Co.,  Owatonna,  Minn. 
Mitchell  Wagon  Co.,  Racine,  Wis. 
Moore  Co.,  Given,  Spring  Valley,  IlL 
Ohio  Cultivator  Co.,  Bellevue,  Ohio. 
Ohio  Rake  Co.,  Dayton,  Ohio. 
Oliver  Chilled  Plow  Co.,  South  Bend, 

Ind. 
Perkins  Wind  Mill  Ck).,  Mishawakajnd. 
Peoria  Drill  &  Seeder  Co.,  Peoria,  111. 
Randolph    Wagon    Works,    Randolph, 

Wis. 
Robinson  &  Co.,  Richmond,  Ind. 
Ross  Co.,  E.  W.,  Springfield,  Ohio. 
Rumely  Co.,  M.,  Chicago,  111. 
St.  Marys  Machine  Co.,  St.  Mays,  Ohio. 
Smalley  Mfg.  Co.,  Manitowoc,  Wis. 
Sandwich  Mfg.  Co.,  Sandwich,  III. 
Sechler  Imp.  &  Cge.  Co.,  D.  M.,  Moline, 

111. 
Sharpies  Separator  Co.,  Chicago,  111. 
Thomas  Mfg.  Co.,  Springfield,  Ohio. 
Tower  &  Sons  Co.,  J.  D.,  Mendota,  111. 
Troy  Wagon  Works  Co.,  Troy,  Ohio. 
Tumbull  Wagon  Co.,  Defiance,  Ohio. 
Tumey  &  Co.,  Joel,  Fairfield,  Iowa. 
Van  Bmnt  Mfg.  Co.,  Horicon,  Wis. 
Vermont  Farm  Machine  Co.,  Bellows 

Falls,  Vt. 
Wilder- Strong    Implement    Co.,    Mon- 
roe, Mich. 
Whitman  Agricultural  Co.,  St  Louis, 

Mo. 
Whitman  &  Barnes  Mfg.  Co.,  Akron, 

Ohio. 
Winona  Wagon  Co.,  Winona,  Minn. 
Wisconsin    Carriage    Co.,   Janesville, 

Wis. 


S64 


f  ARM-MACHINEMY  TRADE  ASSOClATTONS. 


Exhibit  10. 


IiIST  07  HEMBEBS  OF  THE  FOREIGN  TBABE  MANAGERS'  DEPART- 
MENT OF  THE  NATIONAL  IMPLEMENT  A  VEHICLE  ASSOCIATION, 
AS  OF  AlTGirST  20,  1914. 


American  Seeding  Machine  Ck>.,  Spring- 
field. Ohio. 

Appleton  M^.  Co.,  Batavia,  HL 

Aspinwall  Mfg.  Co.,  Jackson,  Mich. 

Associated  Mfra.  Co.,  Waterloo,  Iowa. 

Avery  Co.,  Peoria,  111. 

Cnshman  Motor  Works,  Lincoln,  Nebr. 

Deere  &  Co.,  Moline,  111. 

Farquhar  Co.  (Ltd.),  A.  B.,  York,  Pa. 

FUnt  &  Walling  Mfg.  Co.,  Kendallyille, 
Ind. 

Herschel  Mfg.  Co.,  B.,  Peoria,  DL 


JanesTllle  Machine  Co.,  The,  Janesville, 

Wis. 
La  Crosse  Plow  Co.,  La  Crosse,  Wis. 
Mitchell  Wagon  Co.,  Racine,  Wis. 
Northwestern  Mfg.  Co.,  Fort  Atkinson, 

Wis. 
Emerson-Brantingham    Co.,    Rockford, 

111. 
Peoria  Drill  &  Seeder  Co.,  Peoria,  111. 
Robinson  &  Co.,  Richmond,  Ind. 
St.  Marys  Machine  Co.,  The,  St.  Marys, 

Ohio. 


Exhibit  11. 

REPORT  OF  COMMITTEE  OF  NATIONAL  WAGON  MANUFACTURERS* 
ASSOCIATION  APPOINTED  IN  NOVEMBER,  1903,  TO  FORMULATE 
A  PLAN  FOR  THE  BETTER  MAINTAINING  OF  PRICES— REPORT 
MADE  TO  ASSOCIATION  FEBRUARY  3,  1904. 

To  the  National  Waff  on  Makers  Association: 

Your  committee  appointed  at  the  last  meeting  to  recommend  some 
plan  by  which  the  Association  could  be  made  of  more  practical  value 
to  its  members,  met  in  South  Bend,  on  January  13,  and  devoted  the 
day  to  the  discussion  of  the  different  suggestions  that  had  been  made. 
One  of  these  was  somewhat  discussed  at  the  meeting  of  the  Associa- 
tion in  November,  viz: — ^the  employment  of  a  commissioner  who 
should  have  control  of  and  regulate  prices  in  the  different  localities 
for  each  manufacturer,  gjving  due  consideration  to  the  usual  differ- 
ences in  prices  of  the  various  brands  of  wagons. 

At  our  meeting  in  South  Bend  Mr.  Geiger  presented  a  plan  based 
on  this  suggestion.  Your  committee  after  thorough  discussion  of  the 
whole  matter,  decided  it  would  be  unwise  to  at  once  attempt  the  regu- 
lation of  selling  prices  on  complete  wagons,  but  believed  it  well  worth 
the  cost  of  the  experiment  to  attempt  first  to  establish  a  minimum 
price  for  each  size  and  kind  of  wagon  box  and  for  all  parts  of  wagon 
Doxes.  Aside  from  the  fact  that  some  of  our  members  use  cotton- 
wood  and  others  poplar,  the  details  of  construction,  size  and  kind  of 
material  used,  do  not  materially  differ.  They  decided,  therefore,  to 
recommend  to  the  Association  the  adoption  of  the  following  plan  of 
procedure,  believing  if  we  can  make  it  work  in  connection  with 
wagon  beds  and  parts,  we  can  then  proceed  with  such  parts  as  seats, 
bribes  and  other  extras,  standard  widths  and  thicknesses  of  extra 
tire  and  possibly  the  establishment  of  standard  list  prices.  While  it 
would  not  be  either  practical  or  desirable  to  have  all  list  prices  alike, 
because  of  the  variation  in  specifications  of  the  different  factories  on 
the  various  sizes  and  kinds  of  wagons,  it  is  the  belief  of  your  com- 
mittee that  by  taking  some  standard  specifications  for  each  size 
wtmi  and  establishing  a  list  price  thereior,  a  plan  could  be  devised 
tofigure  out  the  proper  list  price  for  any  wagon  of  the  same  size  by 


EXHIBITS. 


265 


figuring  upon  a  uniform  basis  for  any  variation  in  specifications 
established.  The  greatest  variation  would  undoubtedly  be  found  in 
the  size  of  tire.  Without  further  discussion  of  the  future  work  we, 
therefore,  recommend  as  a  starter  that  we  undertake  the  establish- 
ment of  minimum  prices  to  jobbers,  carload  buyers  and  less  than 
carload  buyers  of  wagon  beds  of  different  sizes,  and  of  different  ma- 
terial and  of  all  parts  of  same,  like  top  boxes,  tip  top  boxes,  etc.,  that 
to  accomplish  this, 

First,  The  Association  shall  appoint  a  committee  to  be  laiown  as  the 
Executive  Committee,  and  to  consist  of  from  nine  to  twelve  repre- 
sentative manufacturers  who  shall  have  charge  of  the  work. 

2nd,  That  the  Executive  Committee  shall  employ  as  a  permanent 
secretary  a  competent  man,  who  under  direction  of  the  committee 
shall  devote  his  entire  time  to  the  work.  He  shall  gather  such  infor- 
mation and  details  as  to  materials  used,  construction,  estimated 
costs,  and  selling  prices,  as  may  be  decided  on  by  the  committee,  and 
without  mentioning  names  of  members,  tabulate  the  information 
and  present  it  to  the  committee  in  that  form. 

The  committee  shall  then  prepare,  and  through  the  Secretary,  send 
to  each  member  of  the  Association  the  schedule  of  minimum  prices 
for  the  different  classes  of  trade,  on  beds  of  all  sizes  and  kinds  and 
parts  thereof;  that  the  report,  when  made,  shall  be  the  unanimous 
recommendation  of  the  committee  to  which  they  are  willing  to 
pledge  themselves,  and  that  upon  its  adoption  by  the  Association  all 
memoers  thereof  shall  agree  to  be  governed  thereby  and  in  good  faith 
carry  it  out  in  their  business. 

3rd.  To  defray  the  expenses  of  the  Secretary  and  actual  traveling 
and  hotel  expenses  of  the  committee,  a  fund  shall  be  raised  by  levy- 
ing an  assessment  upon  each  member  of  the  association  equal  to  one 
quarter  of  one  per  cent  upon  the  shop  pay  roll  of  each  member  for 
the  year  1903.  In  figuring  the  shop  pay  roll  it  shall  include  all  em- 
ployees except  officers,  superintendents  and  salesmen,  but  including 
all  foremen ;  members  manufacturing  other  lines  than  farm  wagons, 
shall,  of  course,  only  include  that  part  of  his  pay  roll  which  properly 
belongs  to  the  wagon  business. 

It  is  the  belief  of  the  committee  that  if  we  heartily  and  faithfully 
pursue  this  course  and  live  up  to  the  recommendation  of  the  com- 
mittee, the  increase  in  profits  to  each  member  shall  many  times  exceed 
the  amount  of  the  assessment  he  may  be  called  upon  to  pay. 

It  is  the  earnest  hope  of  the  committee  these  recommendations  may 
be  heartily  endorsed  and  adopted  by  the  unanimous  vote  of  all  the 
members  of  the  association. 


Exhibit  12. 
question  sheet  relative  to  prices  of  members,  issued 

BY    THE    NATIONAL    WAGON    MANUFACTURERS'    ASSOCIATION, 
JANUARY  1,  1906. 

1 :  Have  your  new  advanced  prices  been  placed  in  the  hands  of  all 
your  selling  agencies?     If  not,  why? — Ans: . 

2:  Are  your  advances  to  both  jobber  and  dealer  in  line  with  the 
recommendation  in  all  cases  ?    Explain  any  exceptions. — Ans : . 


4 


266 


FABM-MACHIKEBY  TBADE  A880CIATI0K8. 


EXHIBITS. 


267 


II' 


S:  Are  your  instructions  that  from  Jan.  1st  on,  you  will  take  no 
more  orders  at  your  1905  prices? — Ans: . 

4 :  Did  you,  or  your  jobbing  or  selling  agent  for  you,  ac5cept  after 
date  of  last  meeting  (Nov.  16)  any  orders  for  shipment  after  Jan. 
1-06  at  your  1^5  prices? — ^Ans: . 

5 :  If  some  such  orders  are  taken,  why  were  they  given  such  pref- 
erence?— ^Ans: . 

6:  How  does  the  volume  of  your  trade  since  last  meeting  to  Jan. 
1st  compare  with  the  same  period  of  1904? — Ans: .  ^ 

7:  Does  the  present  condition  of  the  material  markets  indicate  to 
you  that  manufacturing  cost  is  likely  to  diminish  in  the  near  fu- 
ture ? — ^Ans : . 

8:  Is  there  any  question  in  your  mind  but  that  the  advance  on 
wagons  should  be  and  can  be  maintained,  and  are  you  determined 

to  maintain  it? — ^Ans: • 

(Signed) w 


Date: 


1906. 


EXHIBFT  13. 

BEPBBSENTATIVE  SHEETS  SHOWING  DIFFEBENCES  IN  STANDABD 
SPECIFICATIONS  AND  EQUIPMENT  FOR  FABM  WAOONS  SOLD  IN 
DIFFEBENT  TEBBITOBIES  ADOPTED  BY  THE  NATIONAL  WAGON 
MANT7FACTTJBEBS'  ASSOCIATION  IN  190& 

SfAKDABD  Equipment  fob  Fabm  Wagons. 

(Adopted  December  9,  1908.    RepUces  all  prevlotis  issuei.) 

Showing  equipment  commonly  used  in  the  following  trade  terri- 
tories :^ 
Arkansas:  Arkansas  and  Eastern  Texas. 

Dallas:  All  of  Texas  and  Oklahoma  North  to  Canadian  Biver. 
Iowa :  Iowa  East  of  Western  two  tiers  of  Counties. 
Illinois:  Illinois  North  of  Springfield. 
Indiana:  Entire  State. 

Kansas  City :  Kans.,  W.  Mo.,  and  Okla.,  South  to  Canadian  Kiver. 
Kentucky  and  Tennessee :  Entire  States. 
Ohio:  Entire  State. 
Omaha :  Nebraska  and  Western  Iowa. 

Minneapolis:  Minnesota,  N.  &  S.  Dakota  except  Black  Hills. 
St  Louis:  Eastern  and  Southern  Missouri  and  Southern  Illinois. 
Southeastern :  Ala.,  Ga.,  Fla.,  No.  and  So.  Car.,  Va.,  and  W.  Va. 
Southern:  All  Southern  States  not  included  in  Southeastern. 
Western  and  Mountain  States:  All  West  of  East  line  of  Colorado. 

RECOMMENDATION. 

That  we  adopt  the  Standard  Equipment  with  the  changes  recom- 
mended by  the  Secretary,  and  that  complete  copies  of  it  be  furnished 

» The  sheets  lor  only  three  of  these  territories  are  shown  in  this  exhibit.  These  indi- 
cate the  extmt  and  character  of  differences  in  spedflcations  and  equipment  for  different 
Mrrltorlea. 


to  our  members,  as  a  guide  or  information  to  them  of  what  is  ordi- 
narily considered  standards  in  the  various  territories  outlined,  leav- 
ing it  optional  with  each  member  as  to  how  far  he  would  use  these 
equipments  in  furnishing  his  goods. 


STANDARD  EQUIPMENT. 

Report  of  the  National  Wagon  Manufacturers^  Association  to  its 
members  of  what  careful  inquiry  shows  to  he  the  equipment  deemed 
necessary  in  the  territory  outlined  below, 

(Territory:    Kanna  City.    Comiuising:    Kansas,  Western  Missouri  and  Oklahoma,  South  to  Canadian 

River.)  .  . 


1.  Size  of  Skein  or  Axle 

Z.  Helghrof  wiiMJa.*.'!! 

4.  Siieof  Tire 

6.  Drop  or  stiff  Pole ... 

6.  Length  of  Box 

7.  Total  depth  of  Box.. 


Narrow 

40-48 

Ifxi 

Drop 

KK 

20" 


2f 

Narrow 

44-52 

UxJ 

Drop 

W^' 

24" 


3 

3i 

Narrow 

Narrow 

44-52 

44-52 

IJxl 

lixf 

Drop 

Drop 

10'  6" 

10'  6" 

26" 

26" 

3i 

Narrow 

44-52 

Ifx} 

Drop 

10'  6" 

28" 


% 


arrow 
44-52 
IJxl 
Drop 
10'^' 
28" 


The  following  items  are  considered  "regular"  as  indicated  and 
usually  figured  in  price  of  standard  or  base  wagon — The  items 
marked  "extra"  are  regular  but  the  charge  for  them  is  added  to 
base  price,  while  those  marked  "  special "  are  not  commonly  used  in 
the  territory  and  of  course  should  be  charged  for  extra. 

1.  Bottom  reinforced  over  rear  Bolster Regular  on  all  sizes. 

2.  Patent  Endgate Do. 

3.  Common  Endgate Not  used. 

4.  Top  box  Fasteners Regular  on  all  sizes. 

6.  Anti-Spreaders .- Do. 

6.  Grain  Cleats Do. 

7.  Spring  Seat- Do. 

8.  Lazyback ^^-. _^ Do. 

9.  5th  Cleat  or  Sill Extra  on  all  sizes. 

10.  Foot  Lever  G«ar  Brake Regular  on  all  sizes. 

11.  Gear  Brake  hook  up  irons Do. 

12.  Bow  Staples *__.. ^_^__ __^_  Not  used. 

13.  Tool  or  Jockey  Box Do. 

14.  3rd  Top  Box Extra  on  all  sizes. 

15.  Anti-Spreaders  and  Fasteners  for  third  top  boxes Do. 

16.  Boot  End  Beds  with  Joint  Rods Not  used. 

17.  Bows Do. 

18.  Feed  Boxes Do. 

19.  Seat  on  Risers Special  on  all  sizea 

20.  Lock  Chains Extra  on  all  sizes. 

21.  Bed  Brake Do. 

22.  Reversible  Gear  Brake Special  on  all  sizes. 

23.  Clipped  Gear  Brake Do. 

24.  Riveted  Rims Do. 

25.  Wide  Tires Do. 

26.  Bois  D'Arc  Felloes Not  used. 


* 


268 


h! 


FABM-MACHINEBY  TBADE  ASSOCIATIONS. 
STANOABD  EQUIPMENT. 


Report  of  the  National  Wagon  Manufacturers*  Association  to  its 
members  of  what  careful  inquiry  shows  to  he  the  equipment 
deemed  necessary  in  the  territory  outlined  helow. 


(Territoty:  Soatheaaton.    Comprfaiai: 


OtonkL  floilds.  N.  *  8.  CvoUns,  Virginia  A  W* 
TWO  HOBSB. 


1.  SIm  of  Skein  or  Axlo 

3.  Track 

•.Hri^tofWhMls.... 

4.  Sin  of  Tire 

5.  Drop  or  stiff  Pole. . . 

%.  L«Ktho(Box 

7.  Total  depth  of  Box. . 


»TS 
Wide 


Stiff 

V 

Ifl" 


11 8A 

g-T8 

Wide 

Stiff 

W 

IT' 


1|8A 

21  TS 
Wide 

Uxi 

Stiff 

W 


11  SA 
3TS 
Wide 
4«-52 

SUff 

Wt" 

34" 


11  SA 

3i-TS 

Wide 

44-63 

liz| 

Stiff 

KKd" 

24" 


3J-T8 
Wide 

usa 

l|xi 

Stiff 

WQ" 

36" 


^■* 


The  following  items  are  considered  "regular"  as  indicated  and 
usually  figured  in  price  of  standard  or  base  wagon— The  items 
marked  "  extra  "  are  regular  but  the  charge  for  them  is  added  to 
base  price,  while  those  marked  "  special "  are  not  commonly  used  in 
!^  territory  and  of  course  should  be  charged  for  extra. 


>%1» 


1. 
2. 

a 

4. 

6. 

e. 

7. 

8. 

9. 
10. 
11. 
12. 
13. 
14. 
15. 
16. 
17. 

la 

19. 
20. 
21. 
22. 
23. 
24. 
25. 
26. 
27. 

2a 

29. 


Bottom  reinforced  over  rear  Bolster Special. 

Patent  Endgate. Regular  on  aU  siie& 

Common  Endgate ^^» 

Top  box  Fasteners ^^^  used. 

Anti- Spreaders ^' 

Grain  Cleftts ^  ^^^'       „  _, 

Spring  Seat ^^ra  <«»  all  sizes. 

Lazyback Not  used.. 

5tb  Cleat  or  Sill Special. 

Foot  Lever  Gear  Brake Extra  on  all  sizea 

Gear  Brake  hook  up  irons Not  used. 

Bow  Staples S?^*^^\, 

Tool  or  Jockey  Box Not  used. 

3rd  Top  Box ^ 

Anti-Spreaders  and  Fasteners  for  third  top  boxes —  Do. 

Boot  End  Beds  with  Joint  Rods Special. 

3Q^g Not  used. 

Feed  Boxes 1. ^     P®* 

Seat  on  Risers Special. 

Lock  Chains Extra  on  all  sizes. 

Bed  Brake ^     P?- 

Reversible  Gear  Brake Special. 

Clipped  Gear  Brake Do. 

Riveted  Rims I>o-       „ 

Wide  Tires Extra  on  all 

Bois  D'Arc  Felloes Not  used. 

Club-Stakes Special. 

Round  Reach Do. 

Ox  Tongue ^^' 


^■t 


•■# 


EXHIBITS. 


STANDARD  EQUIPMENT. 


269 


Report  of  the  National  Wagon  Manufacturers^  Assodafion  to  its 
members  of  what  careful  inquiry  shows  to  be  the  equipment  deemed 
necessary  in  the  territory  outlined  below. 

(Twritory:  Western  and  Mountain.   Compririag:  AH  West  of  East  Line  of  Colorado.) 


1.  SiM  of  Skein  or  Axle 

2.  Track 

3.  Height  of  Wheels. ... 

4.  Site  of  Tire 

6.  i>rop  or  stiff  Pole  . . . 

6.  Length  of  Box 

7.  Total  depth  of  Box.. 


2}SS 
Either 

40-48 

Drop 

IC 

20" 


21  SS 
Either 
44^2 
lixf 

Drop 

ice" 

22" 


3  88 

Eithw 

44-52 

Uxl 

Drop 

IC©" 

24" 


3^88 

Either 

44-52 

Drop 

24" 


3^88 

Eithw 

44-52 

if** 
Drop 

26" 


31  8S 

Either 

44-^ 

2xilcl 

Drop 

26" 


The  following  items  are  considered  "regular"  as  indicated  and 
usually  figured  in  price  of  standard  or  base  wagon—The  items 
marked  "  extra "  are  regular  but  the  charge  for  them  is  added  to 
base  price,  while  those  marked  "  special "  are  not  commonly  used  in 
the  territory  and  of  course  should  be  charged  for  extra. 

1.  Bottom  reinforced  over  rear  Bolster i. Regular  on  all  sizes. 

2.  Patent  Endgate Extra  on  all  sizes^ 

3.  Common  Endgate 5T  !L 

4.  Top  box  Fasteners ^^t  useo. 

6.  Anti-Spreaders „  ^  ^o. 

6.  Gram-Cleats Extra  on  all  sizes. 

7.  Spring  Seat Regular  on  all  sizes. 

8   Lazyback  _  — ijo. 

a  6th  Cleat "oVs'llC Extra  on  all  sizes. 

10,  Mountain  or  California  Brake Regular  on  aU  sizes. 

11.  Gear  Brake  hook  up  irons Not  used. 

12   Bow  Staples Regular  on  all  sizes  but 

not  always  wanted. 

18.  Tool  or  Jockey  Box -Regular  on  all  sizes. 

14.  3rd  Top  Box Extra  on  all  sizes. 

15.  Anti-Spreaders  and  Fasteners  for  third  top  boxes — Not  used. 

16.  Boot  End  Beds  with  Joint  Rods Do. 

17.  Bows S\*^^^  **^  ^*^ 

18.  Feed  Boxes got  usea 

19.  Seat  on  Risers ^P?^^  *      i,  „,„^ 

20.  Lock  Chains g^tra  on  all  sizes. 

21.  Bed  Brake Not  used. 

22.  Reversible  Gear  Brake ^^ 

23.  Clipped  G^r  Brake 1^- 

24.  Riveted  Rims bpeciai. 

25.  Wide  Tires _  ,  ^^ 

26.  Bois  D'Arc  Felloes ^        „'    ,,  ^„^^ 

27.  12  and  14  foot  Reaches Exti^  on  all  sizes. 

g;  ciinfo?^lireS:::::~::::^^^^^^^^^^  on  au  size* 


\l 


270 


FABM-MACHINEBY  TBADE  ASSOCUTIONS. 

ExHiBir  14. 


OBNEBAL  LETTEB  ISSUED  BY  ™BNATIONAL  WAGON  MAN^ 
TOBEES'    ASSOCIATION    BELATIVE   TO    TBADE    CONDITIONS    IN 
DECEMBEB,  1908. 

General  Offices, 

625-627-529  American  Trust  Building, 

Chicago,  Dec.  ^8-1908. 

PRESENT  AND  FUTURE  TRADE  CONDITIONS. 

CtEjNTLEI^IEN  * 

You  undoubtedly  have  been  made  aware,  through  the  trade  papers 
and  other  channels  of  publicity,  that  manufacturers  representmg  the 
greater  part  of  the  farm  and  heavy  wagon  output  of  this  country 
have  notified  the  trade  of  an  advance  in  their  sellmg  prices  May  1st 
1909  to  the  extent  of  at  least  10%  over  present  figures,  limiting  the 
time  of  shipment  on  orders  taken  at  present  prices  to  April  30th,  lyuy. 

With  other  manufacturers  who  have  recently  reviewed  the  con- 
dition of  their  business,  going  back,  say,  for  a  period  of  fave  years, 
this  action  has  not  only  been  indorsed  but  like  action  will  be  taken 
by  them,  and  our  purpose  in  calling  your  attention  to  the  matter  is 
that  we  believe  it  should  receive  universal  recognition. 

Permit  me  to  suggest  a  few  propositions  that  have  a  vital  bearmg 
on  this  question  as  to  whether  present  selling  prices  are  prohtable  or 

^Firat  :Vagon  materials  (particularly  Woodstock) ,  labor,  and  over- 
head or  fixed  expenses,  have  increased  beyond  any  advance  m  seUing 
prices  of  wagons  during  the  past  ten  years. 

Second:  During  recent  years  when  trade  volume  was  large,  tne 
ratio  of  manufacturing  profit  greatly  decreased. 

Third  •  With  the  return  of  trade  demand  to  normal,  present  selling 
prices  cannot  return  fair  profits  on  the  large  investment  necessary  to 

this  line  of  manufacture.  .  .,     •  •     ^  *_^«f 

Fourth :  It  has  been  necessary  to  greatly  increase  our  mvestment 
m  order  to  provide  our  usual  supply  of  wagonstock  because  of  the 
rapid  increase  in  price  of  that  material,  and  we  are  confronted  with 
the  certainty  of  still  farther  advances.  .    ^u-   v 

Fifth :  During  the  past  ten  years  a  number  of  concerns  m  this  line, 
neglecting  to  give  attention  to  these  encroachments  on  profits  and 
changing  conditions,  have  quit,  failed,  or  become  financially  embar- 
rassed— others  may  follow  from  the  same  cause.  ^u  x  u 

Sixth:  Retail  profits  on  wagons  have  also  declined,  so  that  by 
many  they  are  only  handled  of  necessity,  as  with  salt  or  sugar,  and 
because  oi  this  condition  the  personnel  of  those  who  retail  our  prod- 
uct as  to  financial  worth  or  business  ability  is  rapidly  getting  poorer. 

Seventh :  We  believe  it  is  a  matter  of  self-preservation  that  a  re- 
adjustment of  these  conditions  should  occur  in  1909,  not  only  by  an 
advance  in  selling  prices  of  the  manufacturer  but  m  the  prices  of 
the  retailer  as  well,  and  we  should  immediately  explain  the  situa- 
tion to  our  trade  and  support  them  in  making  their  adjustments. 

Eighth-  The  principal  consumer  of  our  product,  the  farmer,  has 
received  the  greatest  share  of  prosperity  and  his  ability  to  pay  a 
fair  price  for  his  necessary  working  equipment  is  unquestioned,  so 
that  this  reasonable  advance  in  the  price  of  his  wagon  wiU  m  no  way 
delay  his  purchasing. 


f**     » 


EXHIBITS. 


271 


Our  purpose  in  presenting  this  matter  to  vou  is  two-fold:  First, 
that  you  may  understand  that  the  action  taken  by  these  manufac- 
turers was  not  arbitrary  or  without  absolute  justification,  and  sec- 
ondly, we  believe  that  similar  action  wiU  be  taken  by  every  intelli- 
gent manufacturer  who  values  the  future  of  his  busmess.  We 
believe,  furthermore,  that  it  is  to  the  best  interests  of  our  trade  that 
it  should  not  be  kept  in  a  constantly  disturbed  condition  and  4;hat  it 
these  adjustments  be  made  now,  simultaneously,  they  wiU  be  accepted 
on  their  merits,  just  as  a  necessary  advance  m  freight  rates  or  taxa- 
tion and  we  shall  go  forward  on  a  new  and  more  satisfactory  basis, 
with  new  prices  remaming  stable  in  all  probability  for  some  time. 

CompetSion  in  the  wagon  business  will  never  permit  either  the 
manufacturer  or  retailer  to  obtain  an  exorbitant  profit,  and  therem 
lies  the  protection  of  the  consumer,  but  it  should  not  prevent  the  manu- 
facturer from  getting  fair  returns  from  his  labor  and  mvestment. 

Would  be  pleased  to  have  you  acknowledge  this,  with  an  expres- 
sion of  your  views,  if  you  are  interested.  ^ 
Yours  truly, 

EWM-H. 


Exhibit  15. 

■RTTVTSED    TIBB    LIST— WAGON    DEPARTMENT— NATIONAL    IMPLB- 
^^?  AND  VEHICLE  ASSOCLA.TION-BECOMMENDED  MAKCH  14, 

1907.     TO  BEPLACE  ALL  PBEVIOXTS  ISSUES. 

(Previous  Issue  Aug.  20, 04.    This  issue  May  1, 1911.) 
yet  extra  charge  for  odd  or  wide  tires. 
ONE  AND  TWO  HORSE  WAGONS. 


Regular 
Tires 


OddTires 


^ 


ijxi 


9^  ^ 

luX 
luX 

Ux 

X 

X 
L  X 
L  X 

xl 
3  X 
3  X 
2  X 

2  X 

3  X 
34x 

?* 
3  X 

S  X 

3  X 

3  X 
3f  X 
3>x 
}x 
Six 

4  x 


to.  29 

.58 


l|x|  l|xA 


$0.86 
1.15 


4 
4 

4 
5 
5 
5 
6 


1.78 
3.05 


3.57 


IfxJ 


Ux| 


$0.40     ' 
.09  $0.29 


2.36 
3.62 


5.18 


6.96 


4.14 
5.75 


1.90 
3.16 


3. 68 
5.29 


$0.92 
1.84 


UxA 


1.50 
2.76 


3.28 
4. 


5.75 


7.53 


5.29 


7.07 


2.13 
3.39 


3.91 
5.52 


Uxj 


lixA  ljx| 


$1.38^$0.92 
1,84 
1.44 
2.59 
1.90 


1.67 
2.93 
4.20 


3.45 
5.06 


4.1 
6.84 


6.67 
8.97 


5.52 

7.48 


7.30 
9.60 


lixi 


1.21 
2.47 
3.74 


5.06 
7.02 


6.84 
9.14 


2.99 
4.60 
6.21 


$0.46 

1.38 

.98 

2.13 

1.44 


$0. 


.75 
2.01 
3.28 


2.53 
4.14 
5.75 


92 
52 
67 
98 
01 

29 

55 
82 


Ifxl 


llxj 


1.09 


.63 
1.90 
3.16 


Ifxl 


l|xl 


2xi 


2x1 


$0.75  $1.15 
46 
50 


4.60 
6.56 


6.38 
8.68 


8.45 
11.10 


4.14 
6.10 
8.05 

"6.'92 

8.22 

10.52 

"7.99 
10.64 


13.34 
16.68 


3. 
5. 

7. 

5.' 

7. 

10. 

7.' 
10. 


68 
64 
59 

46 
76 
06 

53 
18 


1.15 
2.76 
4.37 


2.76 


.88 
.22 


4.54 
6.84 
9.14 

6.'6i 
9.26 


11.96 
15.30 


1. 
3. 

1. 
2. 
3. 
4. 

3. 

4. 

6. 

3. 

5. 

7. 

9. 

4. 

7. 

9. 
11. 

7. 

9. 
12. 
14, 
12. 
15. 
19. 


$0.46 
2.84 


$1. 
3. 


04 
30 
57 
83 


16 
77 
38 
16 
12 
07 
03 
95 
25 
55 
85 
02 
66 
31 


1.Z7 
2.53 
3.80 


36 
70 
03 


2 

3 

5 

2. 

4. 

6. 

7. 

3. 

6. 

8. 
10. 

5. 

8. 
11. 


09 
47 


1.90 
3.16 
4.43 


9513 


13 

74 
35 
13 
08 
04 
99 
91 
21 
51 
81 
98 
63 
27 
92 
33 
66 
00 


2. 

4. 

5. 

2. 

4. 

6. 

8. 

4. 

6. 

9. 
11. 

6. 

9. 
11. 
14. 
11. 
15. 
18. 


$2.39 


.81 
2.07 
3.34 


$1.41 


76 
37 
98 
76 
72 
67 
63 
54 
84 
14 
44 
61 
26 
90 
55 
96 
30 
63 


1. 

3. 

4. 

1. 

3. 

5. 

7. 

3. 

5. 

8. 
10. 

5. 

8. 
10. 
13. 
10. 
14. 
17. 
20. 


2.42 


67 

28 
89 
67 
62 
58 
53 
45 
75 
05 


2. 
3. 

2. 
4. 
6. 

4. 

7. 


35  9. 
52 


54 

87 


2013 


30 
91 

65 
60 

56 

77 
07 
37 

19 
83 
48 
89 
23 
56 


$0. 
2. 


98 
59 


2ix| 


3. 
5. 

3. 
5. 

8. 

5. 

8. 
11. 

8. 
11. 
15. 
90118. 


39 

35 

45 
75 
05 


S4.20 


4.60 
6.90 


4.72 
7.36 
10.01 
57!  7.42 
9010.75 


87 
51 
16 


24 
57 


14.09 
17.42 


m 


M 


mtm 


FABM-MACHINEBY  TRADE  ASSOCIATIONS. 
Net  extra  charge  for  odd  or  wide  Wrc«— Continued. 

LIGHT  OKE  HORSE  WAGONS. 


Bcgolar  Tim.  4V 

mi 

im 

U»A 

llxl 

Regular  Tires.  49" 

l|xi 

IJXJ 

IJXA 

Ijxl 

TivUxi         

81.27 
1.67 
2.07 

ti.oe 

1.50 
1.90 

10.00 
1.00 
1.60 

80.58 

.81 

1.00 

Foraix} 

S3. 80 
5.06 

83.62 
4.80 

13.22 
4.49 

82.82 

««  i|xl     

"   3  x| 

4.06 

*  2  xi... 

ADDfw  mA  H**c*  TMcknem  Extm  on  IH^  Om  Bone  Wagon», 

Tir«2  tn. wide 81.2 

«    3^  "      "    1.6 

u     %     u       u  1.9 

NOTKX— The  sizes  of  tires  at  ttM  top  of  thesecolomns  arecommon  narrow  tires  r^ilarly  used,  while  those 
Id  the  extreme  left  column  are  the  tires  likely  to  be  called  for.  The  prices  herein  given  are  recommended 
as  net  prices  to  the  trade  (see  secretary's  report  of  meeting,  March  14, 1907)  and  should  be  the  net  basis  for 
your  price  list.  The  prices  givea  are  for  tires  oa  Iiigh  or  staadard  wheels;  no  reductioa  (o  be  made  on 
wheels  of  less  height. 


Exhibit  16. 

n  OB  «BEPAIB''  FBICE  LIST  SUGGESTED  BY  SPECIAL 
COMMITTEE  APPOINTED  AT  CONFERENCE  OF  FARM  WAGON 
MANTJFACTT7BEBS,  AT  CHICAGO,  JTTNE  5TH,  1912— 3i"  x  10" 
WAGON. 

(Numbeis  1, 2, 3, 4, 5,  6  represent  the  rtoa  Usts  of  prominent  concerns.  The  discounts  shown  are 
those  commonly  given  to  the  retail  deuer.  8«e  "NoUoe,"  below,  for  further  explanation  of  tliis  price* 
list.) 


Liai.  Axle,  wood  only. 
N«t         Do 


Lilt.  Axle,  finished  with  C.  8. 
N«t         Do 


List.  B<dsters,  wood  only.. 
Net.         Do 


List.  Boistera,  finished,  finmt. 
Nut        Do 


List.  Bolstos,  finished,  hind. 
Net        Do 


List  Clevises,  with  pfaa.. 
Net         Do 


List  Doubletrees,  finished. 
Net         Do 


List  Gears,  f^ont,  with  C.  8. 
Net        Do 


40% 


List  Gears,  hind,  with  C.  8. 
Net.         Do 


List  8q.  Hounds,  (rant,  wood  only,  R.  &  L . 
Net         Do 


List  Sq.  Hounds,  hind,  wood  only,  R.  A  L, 
Met        Do 


LM.  Hounds, pde  wood  only  R.  &  L. 
Net        Do 


MM. 


"^ 


Belli. 


S3.50 
2.10 

5.85 
3.41 

2.35 
1.41 

5.25 
3.15 

4.25 
2.55 

.30 
.18 

1.60 
.96 

17.50 
10.50 

16.60 
9.96 

.90 
.54 

1.25 
.76 

.80 
.48 

.80 


2 

50% 


13.88 
1.99 

7.40 
3.70 

2.44 
1.22 

6.00 
2.50 

5.00 
2.50 

.25 
.13 

1.80 
.90 

27.88 
13.04 

21.48 
10.74 

1.06 
.64 

1.32 
.00 

.00 
.30 

.60 


3 

40% 


82.50 
1.50 

5.00 
3.00 

1.60 
.90 

3.85 
2.31 

3.30 
1.98 

.22 
.13 

.88 
.63 

13.55 
8.13 

13.45 
8.07 

.64 
.38 

.92 
.55 

.64 
.32 

.40 


83.10 
2.01 

5.65 
3.07 

1.70 
1.11 

3.25 
2.U 

3.25 
2.11 

.25 

.16 

1.00 
.65 

17. 00 
11.  C5 

14.50 
9.42 

.90 
.60 

.80 
.62 

.60 
.39 

.25 


5 

«% 


83.50 
2.10 

6.00 
3.60 

1.90 
1.14 

4.60 
2.76 

3.80 
2.28 

.30 
.18 

1.50 
.00 

1?.00 
9.81 

12.00 
9.06 

.80 
.48 

1.20 
.72 

.60 
.36 

.30 
.IS 


6 

33J% 


Recom- 
mended 
Gross 
List 


13.00 
2.00 

6.32 
4.21 

1.70 
1.13 

3.90 
2.60 

3.20 
2.13 

.50 
.33 

LOO 
.66 

12.50 
8.33 

11.60 
7.66 

.80 
.53 

1.00 
.66 

.40 
.27 

.40 
.27 

83.80 

7.00 

2.45 

5.00 

5.0O 

.30 

LOO 

25.00 

21.00 

LOS 

L25 

.00 

,m 

#  f  • 


# 


EXHIBITS, 


**JSiXtra  "  or  "  repair  "  price  Ust  suggested,  etc. — Continued. 


273 


List. 
Net 

List. 
Net 

List. 

Net 

List. 

Net. 

List. 
Net 

T 
X/iSt. 

Net 

List. 

Net 

List. 
Net. 

List. 
Net. 

List. 
Net 

List. 
Net 

List. 
Net. 

List. 
Net 

List 
Net. 

List 
Net 

List. 

Net. 


Neck  yokes,  42'',  complete 
Do 


Reaches,  regular  9'. 
Do 


Reaches,  regular  12'. 
Do 


Reaches,  regular  14'. 
Do 


Skeins,  cast,  boxes  and  nuts,  sets. 
Do 


Sandboard,  wood  only. 
Do 


Singletrees,  with  ferrules. 


■^ 


Tongues,  complete. 


«% 


Wrenches. 
Do... 


Steel  Skeins,  with  boxes. 
Do 


Set  44/52  Wheels,  Hxf. 
Do 


Set  44/52  C.  S.  Wheels,  U  x  ^. 
Do 


Stiff  Pole,  comp.  finished. 
Do 


Stiff  Pole,  wood  only. 
Do 


Stake,  ironed. 
Do , 


Stake,  wood  only. 
Do 


8L50 
.90 

2.30 
1.3S 

3.55 
2.13 

3.90 
2.34 

7.50 
4.50 

L75 
L05 

L15 


7.05 
4.23 

.20 
.12 


2 

50% 


50.80 


81-68 

.84 

3.20 
1.60 

3.56 
1.78 

4.72 
2.36 

8.84 
4.42 

L64 
.82 

1.24 
.62 

7.60 
3.80 

(not 
given) 


3 

40% 


54.57 


81.18 
.71 

2.52 
L51 

3.30 
1.98 

3.30 
1.98 

5.94 
3.56 

L61 
.07 

.92 
.55 

6.30 
3.78 

.44 
.26 


4 
35% 


42.00 


81.15 
.75 

2.50 
1.63 

3.25 
2.11 

3.50 
2.28 

7.50 
3.38 

L40 
.91 

.75 
.49 

5.50 
3.58 

.30 
.20 

7.50 
4.8S 

42.00 
27.30 


5 

«% 


6.00 
3.90 

4.00 
2.60 

.60 
.39 

.25 
.16 


81-60 
.96 

2.30 
1.38 

3.60 
2.16 

5.40 
3.24 

5.80 
3.48 

1.60 
.96 

1.20 
.72 

7.00 
4.20 

.40 
.24 

10-80 
6.48 

35.50 
26.66 

35.00 
26.25 

8.50 
5.10 

3.50 
2.10 

.70 
.42 

.30 

.18 


6 

33J% 


81.30 
.87 

2.30 
1.53 

2.80 
L87 

3.30 
2.20 

5.04 
3.36 

1.60 
1.07 

1.00 
.66 

6.50 
4.33 

.40 
.27 


42.00 


Recom- 
mended 
Gross 
List. 


11.65 


3.00 
3.50 


4.50 
8.80 


L70 

1.25 


7.80 

.40 

15.00 


54.00 


7.ao 


4.50 
.60 
.24 


NOTICE. 


The  need  of  a  uniform  gross  list  for  extra  or  repair  parts  for 
Farm  Wagons  has  been  manifest  for  many  years,  and  at  a  representa- 
tive meeting  of  manufacturers  in  this  line  held  at  Chicago  on  June 
5th,  1912,  a  Committee  was  appointed  to  recommend  the  proper 
basis  for  such  a  list.  Their  labors  were  confined  to  the  3J"xlO" 
size,  commonly  used  throughout  the  middle  west,  and  they  present 
below  ^  a  suggested  list  and  recommendation  on  all  common  parts. 

The  first  six  columns  of  this  list  contain  the  present  list  prices  of 
as  many  leading  concerns  in  the  Farm  Wagon  line,  and  the  discount 
appearmg  at  the  head  of  these  columns  are  those  commonly  extended 
by  them  to  the  retail  dealer  f .  o.  b.  cars  factory,  subject  only  to  the 
usual  cash  discount  in  addition. 

The  list  recommended  by  this  Committee  is  that  found  in  the 
extreme  right  hand  column,  which,  if  discounted  50%,  would  result 
in  net  prices  covering  costs  of  production  and  sale  and  netting  on 


t*' 


•—15 ^18 


>  See  list  above. 


274 


FABM-MACHINEBY  TBADE  ASSOCIATIONS. 


average  costs  a  fair  margin.  The  Committee  does  not  recommend, 
however,  the  application  of  a  discount  of  50%  or  any  other  discount, 
but  does  suggest  the  advisability  of  adopting  the  figures  shown  in 
that  column  as  a  gross  list  by  all  manufacturers  just  the  same  as  such 
lists  are  used  for  Dolts,  screws,  nuts  and  other  materials  consumed  in 
manufacture.  It  is  recommended  that  a  special  list  be  made  up  for 
Mauntam  Wagon  Parts^  using  the  gross  list  presented  on  the  reverse 
side  of  this  sheet  *  as  a  basis  and  adding  30  to  40  per  cent,  to  those 
figures  to  make  the  new  list — this  will  enable  the  quoting  of  a 
uniform  trade  discoimt  applicable  to  both  lists. 

The  proper  discount  to  apply  should  be  determined  after  an 
investigation  of  one's  own  cost  in  the  regular  way.  The  widelv 
differing  lists  of  the  several  concerns  shown  in  this  report  are  a  suf- 
ficient illustration  of  the  need  of  a  uniform  list,  especially  as  the  com- 
mon parts  referred  to  in  the  lists  may  be  furnished  by  any  concern  in 
the  business  and  have  very  little  in  individuality,  form  or  shape  to 
jiisfcify  the  wide  difference  often  found  in  these  lists. 

Farm  Wagon  Department 
National  Implement  and  Vehicle  Association, 

Chicack),  III.,  November  26y  191£. 


Exhibit  17. 

PAVEB  OS  STAITDABDIZATION  07  FABM  WAGONS,  BEAD  BEFOBE 
AMEBICAN  SOCIETY  OF  AGBICTJLTTTBAL  ENGINEEBS  BY  E.  E. 
7ABSONAOE,  OF  JOHN  DEEBE  WAGON  CO.,  DECEMBEB  30,  1913. 

(Approved  by  Wagon  Department  of  National  Implement  &  Vehicle  Anodatton.) 

Gentlemen  :  As  you  probably  understand  from  the  nature  of  my 
business,  I  am  vastly  interested  in  the  subject  you  have  assigned  me. 

Manufacturers  of  farm  implements  in  recent  years  have  very 
largely  adopted  steel  construction.  Wagons,  however,  of  necessity 
are  built  very  largely  of  wood,  and  standardization  of  farm  wagons 
will  tend  toward  economy  in  the  use  of  wood  stock.  We  are  there- 
fore all  interested  in  the  conservation  of  our  forests. 

As  an  advance  step,  the  wagon  manufacturers  have  done  a  great 
deal  toward  standardizing  wheel  heights,  and  we  have  a  set  of 
National  Construction  Rules  governing  the  grading  of  wood  stock. 
Wagon  axles,  poles,  etc.,  are  standardized  as  to  raw  sizes,  whereas  in 
times  gone  by  each  manufacturer  had  his  own  patterns,  and  the  mills 
were  forced  to  cut  accordingly,  and  the  waste  was  large  as  a  result. 

W«  have  now  come  to  a  point  where,  in  order  to  further  standardize 
farm  wagon  construction,  it  is  necessary  to  get  the  co-operation  of 
the  consumers. 

I  have  some  definite  ideas  that  I  will  present,  and  I  am  myself  posi- 
tive that  they  will  result  in  great  benefit  to  the  manufacturer  of 
wagons,  the  merchant  who  handles  them,  and  the  farmer  who  uses 
them,  finally.  At  least,  I  hope  to  outline  a  plan  that  may  serve  as  a 
nucleus  in  attempting  to  remedy  the  ridiculous  situation  that  now 
exists  in  the  wagon  trade. 

^  See  list  above. 


^m» 


^% 


f* 


EXHIBITS. 


276 


Let  me  start  with  the  statement  that  by  reason  of  all  wagon 
factories  being  compelled  to  cater  to  the  individual  ideas  of  wagon 
users  in  all  sections  of  the  country,  an  ordinary  farm  wagon  is  cost- 
ing the  manufacturer,  and  consequently  the  farmer,  several  dollars 
more  per  unit  than  would  be  the  case  if  farm  wagons  could  be  classi- 
fied and  built  more  with  the  idea  of  fitting  the  conditions  from  a 
practical  standpoint. 

In  other  words,  gentlemen,  wherever  the  manufacturer  of  any 
staiidard  article  of  trade  has  studied  the  needs  of  the  consumer  and 
built  a  line  of  goods  to  meet  those  needs  in  every  practical  way,  and 
has  not  listened  to  the  whims  and  fancies  of  the  purchaser  as  have  the 
wagon  builders,  the  needs  of  the  consumer  are  better  supplied,  and 
greater  efficiency  in  manufacturing  is  maintained.  The  farm  wagon 
of  today  is  strictly  a  freight  vehicle  and  its  purpose  is  to  haul  farm 
loads.  Therefore,  its  use  in  practically  all  the  country  is  precisely 
the  same,  and  there  is  no  more  real  need  of  the  very  large  variety  of 
construction  and  sizes  than  there  is  in  watches,  or  any  other  article 
of  universal  use. 

Why,  then,  should  wagons  be  made  and  marketed,  in  any  given 
localitv,  with  the  idea  of  furnishing  the  merchant  anything  and 
everything  he  thinks  he  wants— regardless  of  its  adaptability  from 
a  practical  standpoint,  and  regardless  of  the  effect  upon  the  roads  of 
the  various  styles  of  tire  equipment,  etc.  ?  In  this  one  particular,  I 
take  it  that  you  are  all  vitally  interested  in  the  tire  equipment  of 
wagons,  based  upon  approximate  loads,  and  of  such  widths  as  will 
insure  the  conserving  of  the  roadbed,  rather  than  the  destruction  of 
it  through  ignorance. 

As  an  example,  I  have  with  me  an  order,  copy  of  which  reads  as 
follows : 


Amt. 


1. 
1. 

3. 
2. 

3. 
2, 
3. 
3. 


Size. 


2 

2 


2. 
2. 


3|xll 
3|xl0 

3ixl0 
3ixl0 

3x9 
3x9 
3x9 
3x9 

2ix84 
2fx8| 
2|x8| 

3x9 


Kind. 


lix 


1132 
1130 

1130 
1130 

1128 
1128 
1128 
1128 

1126 

126 

1126 

128 

418 
418 


Wheels.       Tires. 


40/44 
40/44 

40/44 
40/44 

40/44 
40/44 
40/44 
40/44 

40/44 
44/52 
40/44 

44/52 

40/48 
40/48 


3  x|RE. 
3  x|RE. 

2  xj  RE . 
2  x|R£. 

2  xfRE. 
lixfRE. 
2  xf  RE. 
lixfRE  . 

IJxf  RE  . 
lixf  RE  . 
lixf  RE  . 

lixf  RE  . 


l}xA. 
lixA- 


Remarks. 


3x4  reach  12"  long. 

8"  stakes  48"  neckyokes. 

8"  stakes  48"  neckyokes. 

8"      "      48"  '• 

8"  stakes  42"  neckyokes. 
10"      "     42"         " 

8"      "      42"  «* 

10"      "      42"  " 


10"  "  42" 
12"  "  42" 
10"      "      42" 


« 


12" 


42" 


Please  note  that  this  is  an  order  for  a  carload  of  30  wagons,  and  it 
includes  14  different  varieties.  This  is  a  condition  that  is  nothing 
short  of  ridiculous. 

In  order  to  lay  a  foundation  in  a  measure,  that  I  am  about  to 
recommend,  let  me  go  over  the  sizes  of  standard  2-horse  farm  wagons, 
as  designated  by  skein  measurements.    They  are  as  follows: 

2fx7       2ix8       2ix8i        3x9       3^x10        3^x11       3}  x  12       4x12 


III! Wiip 


« 


276  FABM-MACHINEKY   TBADE  ASSOCIATIONS. 

Bear  in  mind  that  practically  each  of  these  eight  classes  of  wagons 
is  built  in  all  sorts  of  eauipments— different  heights  of  bolster  stakes, 
wide  track,  narrow  track,  wide  track  narrow  bed,  slip  pole,  drop  pole, 
36/44  wheels,  40/44,  40/48  and  44/52  heights  of  wheels. 

Now  let  us  take  the  3J  x  10  wagon.  This  is  the  size  of  wagon  that 
sells  regularly  in  the  central  states  from  Ohio  to  the  Wyoming  and 
Colorado  lines. 

Kindly  mark  this  statement:  If  a  large  wagon  factory  to-day 
should  have  on  hand  in  the  3J  x  10  size  of  wagon  only,  one  each  of 
all  the  styles  and  forms  of  equipment  demanded  in  various  parts  of 
the  country,  and  that  they  might  be  certain  of  being  able  to  ship  any 
particular  equipment  within  an  hour's  notice,  they  would  have  to 
have  on  hand — 

640  different  styles  of  gears.  . 

157  different  sets  of  wheels  with  various  heights  and  tire 

widths. 
140  different  styles  of  wagon  boxes. 

This  is  a  condition  that  is  appalling;  and  these  figures  will  hardly 
be  believed  by  the  wagon  manufacturer  himself,  unless  he  spends  a 
week  or  more  tabulating  the  various  equipment  he  is  compelled  to 

furnish. 
I  have  in  mind  four  avenues  of  standardization,  viz : 
First— Standardizing  and  Simplifying  the  Sizes  of  Wagons. 
Second— Standardizing  the  Track  of  Wagons. 
Third— Standardizing  and  Simplifying  Wheel  Heights. 
Fourth— Standardizing  Tire  Widths  and  Thicknesses. 

FIRSl^-STANDAKDIZING,  OR  IN  REAMTY,  REDUCING  THE  NUMBER  OF  SIZES 

OP  WAGONS. 

For  instance,  a  2J  x  8  and  a  2i  x  81—2  horse  wagons.  In  reaUty, 
it  takes  an  expert  to  tell  the  difference  in  these  two  wagons.  Dif- 
ference in  carrying  capacity  is  barely  nominal,  as  there  is  only  from 
35  to  50  lbs.  difference  in  the  weight  of  these  wagons.  The  box 
equipment,  pole,  axles— are  the  same.  One  wagon  would  take  the 
place  of  these  two,  were  it  not  for  the  fact  that— first,  the  salesman 
is  educated  to  sell  both  sizes— the  merchant  thinks  he  needs  both 
sizes,  and  buys  them— and  in  turn  asks  the  farmer  which  of  the  two 
sizes  he  wants.  If  the  implement  man  happens  to  have  on  hand  a 
21  X  8  wagon,  he  sells  that.    If  he  has  the  other  size,  that  sells  equally 

as  well,  as  a  rule. 

Now  we  have  eight  sizes  of  two-hors©  wagons.  Suppose  we  re- 
move the  incentive  for  the  purchaser  of  a  farm  wagon  asking  the 
measurements  of  the  skein  of  the  wagon  he  is  going  to  buy.  Sup- 
pose we  forget  the  size  of  the  skein  entirely.  A  farmer  comes  to 
town.   He  wants  a  light  2-horse  wagon,  or  he  wants  a  medium  2-horse 

^ippose  we  recommend  that  four  sizes  of  2-horse  wagons  be 
bought,  instead  of  eight,  designating  them  as  follows : 

light  2-borse  Wagon «Qa»J»  standard  2|  x  a 

Medium  2-horse  Wagon equals  3  x  9. 

Standard  2-hor8e  Wagon equals  3i  x  10. 

Heavy  2-hor8e  wagon,  such  as  is  used  far  teaming 
work,  logging,  hauling  wood,  etc equals  3i  z  12. 


EXHIBITS. 


277 


Vl 


Results — The  manufacturer  of  wagons  would  gain  materially  by 
such  an  arrangement.  Jobbing  trade  and  merchants  generally  would 
gain  for  the  same  reason  that  the  manufacturer  would  be  the 
gainer — and  that  is,  their  stocks  would  be  simplified — ^they  would 
need  to  carry  less  stock  in  order  to  supply  their  trade,  and  a  big  in- 
centive would  be  removed  for  the  user  of  a  wagon  to  buy  other  than 
the  wagon  that  would  be  fitted  for  his  needs. 

This,  I  think,  could  be  brought  out  by  concerted  action,  details 
of  which  I  will  discuss  later. 

SECOND — STANDARDIZING  THE  TRACK  OF  WAGONS. 

There  is  no  necessity  or  value  in  the  variation  in  the  track  of 
wagons,  and  in  fact,  the  variation  in  track  widths  is  a  positive  detri- 
ment, an  inconvenience  in  many  sections  of  the  country,  and  is  simply 
brought  about  by  one  of  two  reasons. 

I  might  say  to  start  with,  that  there  are  no  less  than  one-half 
dozen  widths  of  track  in  the  United  States,  although  the  common 
variation  is  the  difference  between  the  Narrow  Track  and  the  Wide 
Track— viz:  Narrow  Track,  4'  6"  center  to  center,  and  Wide  Track 
6'  center  to  center. 

The  variation  in  the  track  of  wagons  has  been  brought  about  in 
years  gone  by  from  one  or  two  reasons,  principally. 

First — a  local  wagon  maker,  in  many  sections,  would  have  a  track 
figured  out  of  his  own,  and  he  would  set  the  pace  in  his  particular 
neighborhood. 

The  other  reason  for  maintaining  a  wide  or  narrow  track  in  any 
one  neighborhood  has  been  simply  the  so-called  necessity  of  each 
farmer  buying  his  new  wagon  of  a  track  that  would  fit  the  ruts  made 
by  his  neighbors. 

There  can  be  no  objection  made  to  standardizing  the  tracks  to 
conform  to  the  standard  narrow — 4'  6"  center  to  center.  The  wide 
track  wagons  naturalljr  carry  longer  axles — therefore,  with  a  maxi- 
mum load  on  a  given  size  of  wagon,  the  wagon  will  stand  up  longer 
and  stand  more  hard  usage  by  having  a  narrow  track  axle. 

It  may  seem  ridiculous  to  tell  you  that  there  are  towns  in  several 
of  the  states  where  an  implement  man  is  forced  to  carry  both  wide 
and  narrow  track  wagons — selling  wide  track  east  of  his  town,  and 
narrow  track  west  of  his  town. 

The  necessity  for  following  the  custom  as  far  as  track  is  concerned 
in  any  given  territory  is  becoming  less  and  less  as  the  country  roads 
are  becoming  better.  As  roads  are  built  up,  rounded  up,  MacAdamed, 
drained,  etc.,  the  ruts  forming  even  at  the  worst  time  of  the  year,  are 
becoming  less  noticeable. 

As  a  practical  example — seven  or  eight  years  ago  in  California,  all 
tracks  of  gears  were  demanded,  and  each  small  valley  or  community 
had  its  distinctive  track.  Thru  the  efforts  of  the  National  Associa- 
tion of  Wagon  Manufacturers  and  the  implement  men  generally  in 
that  territory,  the  complicated  situation  was  changed,  and  now  in 
California  no  other  wagon  is  sold  than  the  regular  Wide  Track 
6-foot  width. 

Another  example  is  that  in  the  southern  part  of  our  own  state,  for 
many  years  there  was  a  6'  1"  track  in  use.    This  old  track  has  been 


I 


278 


FABM-MACHINEBY  TRADE  ASSOGIATEOKS. 


EXHIBITS. 


279 


I 


eliminated  by  several  of  the  larger  manufacturers  who  did  business 
in  that  territory,  refusing  to  build  5'  1"  track. 

I  have  a  plan  for  bringing  it  about  which  I  will  go  into  later  for 
standardizing  track. 

THIBD — STAKDAROIZINQ   AND   SIMPLIFYING  AliL   WHEEL   HEIGHTS. 

Until  comparatively  few  years  ago,  there  were  more  different  wheel 
heights  in  wagon  wheels  than  could  be  counted  on  the  fingers  of 
both  hands;  in  fact — ^there  were  forty-one  different  heights.  Thru 
the  efforts  of  the  Wagon  Manufacturers  Association  several  years 
ago,  an.  attempt  was  made  to  simplify  wheel  heights,  by  naming 
four  heights,  viz : 

36/44    40/44    40/48    44/52 

This  attempt  at  reducing  the  wheel  heights  to  four  standard  sizes 
has  been  very  nearly  successful.  There  are  some  exceptions,  how- 
ever, owing  to  one  or  more  manufacturers  not  having  the  heart  to 
refuse  building  all  heights  of  wheels  because  of  the  fear  of  losing 
a  little  trade.  There  is  one  manufacturer  that  even  at  the  present 
time,  makes  a  54"  rear  wheel. 

For  the  past  vear,  ouf  Wagon  Association  has  agitated  a  reduction 
in  the  height  of  wagon  wheels. 

There  is  a  consensus  of  opinion  that  there  is  no  longer  any  necessity 
for  building  a  44/52  wheel  height.  The  reasons  for  this  assumption 
can  be  summed  up  as  follows : 

First — ^wagon  spokes  are  mostly  sawed  to  equip  44/52  wheels. 
When  36/44  wheels  are  used,  or  smy  other  height,  from  2  to  4  inches 
of  each  spoke  is  wasted  and  thrown  into  the  scrap  pile. 

Tn  the  interests  of  conservation  of  wagon  stock,  elimination  of  the 
44/52  wheel  height  is  advisable. 

Again — the  higher  the  wheel,  the  greater  the  strain  on  the  axle  and 
wheel  also.  It  may  be  interesting  to  some  of  us  to  know  that  strain 
or  breakage  on  a  wagon  wheel  or  axle  is  not  brought  about  by  the 
downward  pressure  of  the  load,  but  axles  are  broken  and  wagon 
wheels  are  crushed,  in  99  cases  out  of  100,  by  reason  of  the  side  play 
or  shifting  of  the  load  sideways. 

For  instance,  a  medium  2-horse  wagon  may  be  carrying  a  load  of 
3000  lbs.  If  the  road  were  good  and  level,  the  wagon  could  be  loaded 
up  to  5000  lbs.,  or  6000  lbs.,  without  injuring  it,  but  with  a  3000-lb. 
load,  one  wheel  drops  sideways  from  the  top  of  .a  stone;  result — a 
smashed  wheel  or  broken  axle. 

My. proposal  then,  is  to  make  the  40/48  wheel  height  the  standard 
high  wheel  construction.  Wherever  the  40/48  height  of  wheel  has 
been  standard,  it  has  taken  the  place  entirely  of  the  44/52  height. 

Objection  has  been  made  that  the  40/48*^  pulls  harder  than  the 
44/52.  In  answer,  there  is  only  a  10  per  cent,  reduction  in  height  of 
wheels,  and  tests  show  even  under  extreme  conditions  only  a  2  per 
cent  difference  in  draft.  Under  ordinary  road  conditions  the  differ- 
ence in  draft  is  not  readable  on  a  dynamometer. 

The  only  other  possible  objection  to  the  elimination  of  the  old 
style  high  wheel  is  that  in  stump  countries,  as  in  Arkansas  and 


4l# 


w 


Eastern  Texas,  the  stumps  are  so  high  as  to  interfere  with  the  front 
axle  when  using  only  40"  front  wheels. 

The  difference  in  the  heights  of  the  front  axle  from  the  ground 
as  between  40"  and  44"  front  wheels  is  only  2  inches,  the  40"  con- 
struction having  18"  and  19"  clearance.  This  so  called  medium 
height  wheel  wagon  has  taken  well  in  the  rough  sections  of  the  states 
mentioned,  and  a  little  education  will  wipe  out  these  fancied  objec- 
tions. 

Furthermore,  with  the  40/48  wheel  height  the  wagon  box  is  lower, 
closer  to  the  ground,  and  easier  to  load  into. 

Then — 40/44  as  medium  height,  which  is  largely  used  in  the  East 
and  South. 

Then  36/44  as  low  wheel  construction. 

FOURTH — STANDARDIZING  TIKE  WIDTHS  AND  THICKNESSES. 

This  last  proposition  is,  I  believe,  of  more  vital  interest  to  your 
Honorable  Body  than  the  sections  preceding  this.  I  take  this  to 
be  a  fact,  because  you  all  necessarily  would  be  interested  in  good 
road  building  and  road  preservation. 

Therefore,  a  sane,  simple  standardization  of  wagon  tire  widths, 
based  on  various  sizes  of  wagons  and  according  to  the  maximum 
size  of  load  carried  by  the  average  wagon,  is  of  vast  importance. 

At  the  present  time,  there  are  over  50  different  widths  and  thick- 
nesses of  tires  demanded  on  the  various  heights  of  wheels  and  on 
various  sizes  of  wagons.  The  result  is  that  a  wagon  factory  catering 
to  the  trade  in  various  parts  of  the  country,  is  compelled  to  carry 
many  hundreds  of  different  sets  of  wheels  in  order  to  supply  the 
demands.    This  wheel  situation  alone  is  little  short  of  ridiculous. 

Farmers  throughout  the  country  have  clung  to  the  narrow  tire 
because  of  the  deep  ruts  in  the  road  made  by  the  other  fellow's 
wagons  having  narrow  tires,  and  when  a  farmer  comes  to  buy  a  new 
wagon,  he  dare  not  buy  a  3"  tire  wagon  because  four  horses  couldn't 
pull  the  wide  tire  wagon  when  the  wheels  got  down  into  ruts  with 
narrow  bottoms  made  by  narrow  tire  wagons. 

I  take  it  from  the  sentiment  of  those  interested  in  better  roads 
lies  entirely  in  recommending  and  forcing  the  use  of  wide  tires. 
Therefore,  I  have  the  following  table  to  suggest  as  a  standard  tire 
equipment. 


Wood  Axle  w/Cast 
or  Steel  Skein. 

Size. 

SoUd  Steel 
Axles,  Size. 

Tubnlar 
or  Hollow 
Axles,  Size. 

Width  of  Tire. 

/2-1/8" 

\2i" 

/2-3/8"      .- 

1-1/8" 

These  sizes  to  have  tire  IJ"  wide. 

1  Horse 

li'( 

1-5/8" 

1-3/8".... 

1-7/8" 

2" 

These  sizes  to  have  tire  2"  wide. 
These  sizes  to  have  tire  2"  wide. 

Light  2-horse 

\24''. 

/2|" 

3^' 

1-3/8" 

i¥'. 

1-5/8" 

ir- 

2^' 

These  siz^s  to  have  tire  2"  wide. 
These  sizes  to  have  tire  2^"  wide. 
These  sizes  to  have  tire  3"  wide. 

Medium  2-horse 

2-1/8" 

2-3/8" 

2-5/8" 

2-7/8" 

3-1/8" 

Standard  2-horse.. - 

rsj" 

3" 

4  ' 

These  sizes  to  have  tire  3"  wide. 
These  sizes  to  have  tire  4"  wide. 

Heavy  2-hor8e 

2J" 

2-3/8" 

2i" 

These  sizes  to  have  tire  4"  wide. 
These  sizes  to  have  tire  4"  wide. 

n" 

Ui" 

These  sizes  to  have  tire  5"  wide. 

2-5/8" 

These  sizes  to  have  tire  5"  wide. 

•A<i 


280 


FAEM-MACHINEBY  TBADE  ASSOCIATIONS. 


EXHIBITS. 


281 


>l 


i 


At  the  present  time,  something  over  45  various  thicknesses  of  tire 
are  required.  Some  of  the  differences  in  the  thicknesses  are  so  small 
that  it  takes  an  expert  to  tell  the  difference  between  the  tires.  As  an 
mstance,  the  difference  between  9/16"  and  5/8"  thicknesses  is  l/16th 
of  an  inch.  This  difference  is  so  trifling  that  an  expert  handling  a 
dozen  wheels,  six  of  9/16"  and  six  of  5/8"  thickness,  absolutely  can- 
not tell  them  apart  after  he  has  handled  the  first  two  of  the  twelve. 

Then  again,  on  a  1^"  tire  alone,  we  are  required  to  build  wheels 
of  various  heights  and  in  the  various  thicknesses. 

li  X  3/8        11  z  5/8        1|  z  i        li  z  I        Hz  9/16 

Now  as  to  the  various  thicknesses  of  tire.  On  wide  tire  wagons 
8/8"  and  |"  thickness  should  be  the  rule ;  that  is,  on  light  wagons 
carrying  tires  from  1^"  to  2^"  in  width.  On  the  3,  4  and  5  in.  tires, 
I  would  recommend  3/8  in.  for  soft  roads  or  trucks  used  on  the  farm 
ordy;  1/2  in.  thicknesses  for  ordinary  road  conditions  and  5/8  or 
3/4  in.  thickness  for  rough  sections  where  rock  is  encountered  in  the 
roads,  Mac  Adam,  etc. 

BEGOMMENDATIONS  AS  TO  METHODS  FOR  BRINGING  ABOUT  STANDARDIZA- 
TION OF  WAGON  EQUIPMENT. 

The  consensus  of  opinion  seems  to  be  that  we  should  have  uniform 
wide  tire  laws  passed  by  the  various  State  Legislatures.  If  we  can 
arrive  at  some  decision  as  to  what  we  want  and  what  is  needed ;  then 
remains  simply  the  problem  of  best  reaching  those  men  who  have  it 
in  their  power  to  pass  this  uniform  tire  law. 

We  have  all  noticed  that  the  various  states  are  passing  wide  tire 
laws,  and  every  law  is  at  variance  with  every  other  law. 

I  think  what  is  needed  is  a  plan  worked  out  definitely  whereby  each 
size  of  wagon  now  in  use  shall  be  equipped  with  a  tire  sufficiently 
wide  to  carry  a  maximum  load  without  injuring  the  road  bed.  Such 
a  table,  coupled  with  a  road  law  worded  as  would  be  approved  by  the 
Eoad  Engineers  connected  with  the  various  Agricultural  Colleges 
and  backed  by  your  Society,  would  meet  the  approval  of  every  body 
of  Legislators  in  every  State.  It  is  no  criticism  of  our  law  makers 
to  state  that  they  have  in  the  past,  in  many  cases,  voted  blindly  for 
road  laws  because  they  have  no  guide  and  have  not  understood  just 
what  was  needed  to  better  preserve  the  road  bed. 

If  laws  are  made  in  the  various  states  with  definite  similarity  as 
to  wording  and  forced  equipment  of  tire  widths,  farmers  will  buy 
wide  tire  wagons  accordingly,  and  soon  change  the  road  conditions 
for  the  better. 

I  would  like  to  say  that  the  Manufacturer  has  no  selfish  interest  in 
forcing  wide  tires  in  place  of  narrow  tires,  as  he  would  just  as  soon 
build  one  as  the  other.  However,  we  are  all  interested  in  simplify- 
ing the  variety  and  we  have  of  course  a  big  interest  in  road  better- 
ment. In  other  words,  we  have  no  axe  to  grind  in  connection  with 
the  changing  of  tire  widths,  other  than  simplification. 

The  Wagon  Manufacturers,  Implement  Men  and  Jobbers  are 
vitally  interested  in  the  other  lorms  of  standardization  and  simpli- 
fication as  described.    The  CJonsumer  would  be  assured  of  a  better 


4 


V 


product  in  the  wagon  he  buys,  and  he  will,  by  co-operating  with  the 
manufacturer,  obviate  the  necessity  for  very  large  increases  in  the 
cost  of  wagons  within  the  next  year  or  two.  Farm  wagons  cannot 
be  long  made  under  the  job  shop  plan  now  existing  without  the  neces- 
sity of  having  to  materially  increase  prices  to  the  consumer. 

1  believe  that  there  is  only  one  sane  basis  upon  which  to  start  an 
agitation  working  toward  the  standardization  described;  viz:  To 
create  such  a  sentiment  in  various  ways  as  will  bring  the  Public  gen- 
erally to  an  appreciation  of  what  is  to  be  gained.  A  great  deal  of 
good  can  be  done  by  your  Honorable  Body  backing  and  recommend- 
ing standardization  along  the  lines  described — or  with  such  changes 
and  additions  as  you  may  see  fit  to  recommend.  The  various  Agri- 
cultural Colleges  can  do  a  great  deal. 

The  Farm  Papers  can  be  enlisted  in  our  favor.  I  believe  they 
will  cheerfully  publish  any  matter  that  is  given  to  them  along  these, 
lines. 

Then,  I  think  that  a  definite  plan  should  be  laid  out  and  published 
through  various  channels,  copies  forwarded  to  the  Legislators  of 
our  various  states,  and  copies  sent  to  all  Road  Commissioners,  enlist- 
ing their  efforts. 

In  turn,  the  National  Wagon  Makers  Association  could  get  back 
of  a  plan  and  pass  resolutions  agreeing  that  after  certain  dates, 
certain  changes  in  simplification  and  standardization  be  adopted  at 
all  wagon  factories. 

In  turn,  the  various  wagon  factories,  through  their  traveling  sales- 
men and  jobbers,  could  carry  on  a  definite  campaign  with  the  trade 
and  farmers  generally,  working  toward  the  same  results. 

There  is  no  question  in  my  mind  but  that  every  man  in  this  coun- 
try, regardless  of  whether  he  live  in  a  town  or  in  the  country,  is  in- 
terested in  better  roads.  The  automobile  people  are  wise  in  consist- 
ently refusing  to  build  anything  but  narrow  track,  and  they  have 
been  able  to  hold  to  one  track. 

Wide  tires  on  all  wagons  will  mean  better  roads,  the  hauling  of 
heavier  loads  with  less  horse  power,  less  wear  and  tear  on  the  wagon, 
team  and  equipment,  besides  saving  of  time  required  to  market  the 
farmer's  product.  This  matter  of  time  alone  is  getting  to  be  a  tre- 
mendous factor  to  the  farmer,  owing  to  the  scarcity  and  the  high 
price  of  farm  labor. 

I  think  I  can  speak  very  decidedly  for  the  Wagon  Manufacturers 
in  saying  that  they  will  be  willing  and  anxious  to  co-operate  with 
this  Body  to  bring  about  results  that  cannot  help  but  be  of  vast  bene- 
fit to  the  country  as  a  whole. 

In  conclusion,  will  say  I  would  be  very  glad  to  have  your  sugges- 
tions and  criticisms.  In  speaking  for  the  Wagon  Manufacturers  as 
a  whole,  I  think  I  would  be  safe  in  saying  that  our  interests  and  the 
interests  of  the  consumer  are  so  nearly  identical  that  they  would  be 
willing  and  glad  to  co-operate  for  the  standardization  plan  that  will 
work  to  the  greatest  benefit  of  all  concerned. 


I 


II 


I 


ll 


282 


FARM-MACHINERY  TRADE  ASSOCIATIONS. 

Exhibit  18. 


BECOMMEITBATIOKS  OF  THE  NATIOWAL  PLOW  ASSOCIATION  TO 
ITS  MEMBEBS  BEGABDING  LIST  FBICES,  STAKDABD  SPECIFICA- 
TIONS,  EQUIPMENT,   ETC.,    1907-1909. 

To  the  members  cf  the  National  Plow  Association: 

This  booklet  contains  the  list  prices  of  Walking  Plows,  Extra 
Shares  and  Lever  Harrows;  also  standard  equipment  for  all  Imple- 
ments recommended  by  the  Association  since  its  organization,  viz : 
[Index  to  booklet  omitted.] 

None  of  the  within  recommendations  are  intended  in  any  way  to 
regulate  the  net  selling  prices. 
Respectfully,  yours, 

Charles  E.  Sanders,  Secretary/, 

Sums  No.  525  American  Trust  Bldg., 

Chicago,  June  21, 1909. 


LIST  PRICES  or  WALKING  PLOWS. 


Beoommendsd  Mat  8,  1907. 


BTUBBLI   SEKIES. 


Steel  Beam,  Medium  Landside,  Double  Shin,  Soft  Center  Mould, 
and  Slip  Share. 

12  in    flT.  00  I  16  In $21.  50 

14  in 19.00  I  18  In 


25.00 


STUBBLE   SERIES. 


Steel  Beam,  Low  Landside,  Double  Shm,  Soft  Center  Mould,  and 

Slip  Share. 

12  In $17. 00  I  16  In $21. 50 

14111 19. 00  I  18  in 


25.00 


TUET  AHD  BTUBBOE  SEBIE8. 


Steel  Beam,  Medium  Landside,  Double  Shin,  Soft  Center  Mould, 
uid  Slip  Share. 


12  in $18. 00 

13  !n 10.  00 

14  in..: 20. 00 


16  in $22.  50 

18  in 26. 00 


TUBF  AND  STUBBLE  SEBTE8. 

Steel  Beam,  Low  Landside,  Double  Shin,  Soft  Center  Mould,  and 
Slip  Share, 

i2in    $18.00    16  in —    $22.50 

13  In    19.  CO     18  in 26. 00 

14  in - —      20. 00 

It  is  recommended  that  the  13  in.,  15  in.  and  17  in.   in  the  Stubble 
Series,  both  steel  and  wood  beam,  be  dropped,  and  that  the  16  in. 


1 1 


^ !  • 


'**!  * 


^1* 


EXHIBITS. 


283 


and  17  in.  in  the  Turf  and  Stubble  Series,  steel  and  wood  beam,  be 
dropped,  also  Upset  or  Single  Shin  Plows  in  both  the  Stubble  and 
Turi  and  Stubble  Series,  be  dropped  from  the  list. 


MIXED  LAND — ^BLUE  SEBIES. 


Steel  Beam,  Soft  Center  Mould,  Crucible  Share  and  Landside, 
Double  Shin,  Slip  Heel,  Medium  Landside,  with  Extra  Crucible 
Share. 


7to. 

.8  in. 

9in. 

10  in 


Northern 
list. 


SIO.OO 
11.00 
12.50 
14.50 


Southern 
list. 


$12.50 
14.00 
15.50 
17.00 


11  in 

12  in 
14  in 
16  in 


Northwn 
list. 


$15.75 
17.00 
19.75 
22.50 


Southern 
list. 


$19.00 
21.50 
24.50 
27.00* 


MIXED  LAND — BLUE  SEBIES. 


Steel  Beam,  Solid  Mould,  Crucible  Share  and  Landside,  Double 
Shin,  Slip  Heel  with  Extra  Crucible  Share. 


Northern 
list. 

Southern 
list. 

Northern 
list. 

Southern 
list. 

7In 

$9.00 
10.00 
11.50 
13.50 

$11.50 
13.00 
14.50 
16.00 

11  in 

$14. 75 
16.00 
18.50 
2L25 

$18.00 
20  50 

Sin 

12  in 

91n 

14in 

23  25 

10  in 

16in 

25.75 

N.  B. — ^The  above  7-inch — Northern  List — were  reduced  from  $11.00 
and  $10.00  to  $10.00  and  $9.00  respectively,  April  30,  1909. 


BLACK  LAND   SEBIES. 


Steel  Beam,  Soft  Center  Mould,  Wrought  Frog,  Crucible  Slip 
Share  and  Landside,  Single  Shin,  with  Extra  Crucible  Share. 


Southern  List  Only. 

6  in $10. 50 

7  in 11.  50 

8  in 13. 00 

9  In 14.  50 

10  in 16. 00 


Southern  List  Only. 

11  in $18.  00 

12  in 20.  50 

13  in 22.  00 

14  in 23. 50 


BANDY  LAND  SEBIES. 


Steel  Beam,  Soft  Center  Mould,  Wrought  Frog,  Crucible  Slip 
Share  and  Landside,  with  Extra  Crucible  Share. 


Southern  List  Only. 

7  in $11.  00 

8  in 12.  50 

9  in 14. 00 

10  in 15. 50 


Southern  List  Only, 

11  in $17.00 

12  in 18.  50 

14  in 22.  50 

16  in 25. 00 


WOOD  BEAM  PLOWS. 


It  is  recommended  that  the  list  price  on  Wood  Beam  Plows  in  the 
Stubble,  Turf  and  Stubble,  Mixed  Land,  Black  Land,  Sandy  Land 


Ill 


PI 


l! 


284 


FARM-MACHINEBT  TRADE  AfiSOCUTIOKS. 


fts  listed  above,  be  listed  $1.00  each  over  Steel  Beam,  up  to  and  in- 
cliiding  11  in.,  and  ^.00  for  12  in.  and  above. 

On  Railroad  and  Township  Plows  add  $3.00  each  to  the  list  prices 
yon  are  now  using. 

WOOD  OB  STEEL  STAITDABD  OB  HAZEL  TIAWS — STUBBLE  SEBIE8. 

Wood  Beam,  Soft  Center  Mould,  Wood  or  Steel  Standard,  Solid 
Bar  Share,  Iron  Strap  imder  Beam  with  Quincy  or  Reversible  Coul- 
ter with  Clamp. 

13  In : $19.60 

14  in 20.60 

16  in 23.60 


10  In 116.60 

11  in 17.60 

12  in 18.60 


WOOD  OB  STEEL  8TANDABD  OB  BASEL  PLOWS — TUBF  AND  STUBBLE  SEBIES. 

Wood  Beam,  Soft  Center  Mould,  Wood  or  Steel  Standard,  Solid 
Bar  Share,  Iron  Strap  under  Beam  with  Quincy  or  Reversible  Coul- 
ter with  Clamp. 

10  in  $16.60     13   in $19.60 

11  in 17.60     14   in 20.60 

12  in 1&  60  1  16  in 1 23. 60 

Add  $1.00  to  the  above  list  prices  on  each  size  for  Beam  Strapped 
top  and  bottom. 

BAB  8HABE  PLOWS — STUBBLE  SEBIES. 

Steel  Beam,  Low  Landside,  Double  Shin,  Soft  Center  Mould  and 
Share. 

10  in $15.00 

11  in 16.00 

12  in 17.00 


14   in $19.00 

16  In 21.50 


BAB  SHABE  PLOWS — TUBF  AlfD  STUBBLE  SERIES. 

Steel  Beam,  Low  Landside,  Double  Shin,  Soft  Center  Mould  and 

Share. 

14  in $19.00 

16  in 21.50 


10  in $15.00 

11  in --      16. 00 

12  in 17.00 


TIlfBEB  LAND  PLOWS. 


Wood  Beam,  Soft  Center  Mould,  Malleable  or  Steel  Standard, 
Solid  Bar  Share,  Iron  Strap  Under  Beam,  with  Quincy  Cutter  and 
damp. 

11  in.: $18.00  I  14 

12  In 20.00 


$22.00 


Add  for  Beam  Strapped  Top  and  Bottom  $1.00  list  Extra  to  above 
sizes. 

COMBIlf ATIOH   BASTEBN   PLOWS. 

From  the  Turf  and  Stubble  list  shown  on  page  2  *  when  equipped 
with  cast  share  and  extra  cast  share  deduct  from  list  $1.50  each  size. 

>  8m  11.282. 


'^^W 


^' 


EXHIBITS. 


285 


When  equipped  with  cast  landside,  cast  share  and  extra  cast  share 
deduct  $3.00  each  size. 

Recommended  Apbil  30,  1909. 

When  equipped  with  cast  landside  deduct  from  list  50  cents  each 


size. 


MIDDLE  BBEAKEBS. 


Steel  Beam,  Soft  Center  Mould,  Crucible  Share,  no  Extra  Share. 


8  in $14.50 

9  in 15.00 

10  in 15.50 


12  in $16.50 

14   in 19.00 

16   in ^ 23.00 


For  Solid  Mould  instead  of  Soft  Center  deduct  $1.50  from  above 
list  for  corresponding  sizes. 


Recommended  May  8,  1907. 


PBAIBIE  BBEAKEBS. 


Solid  Mould,  Gauge  Wheel,  Rolling  Coulter,  Crucible  Slip  Share 
and  Extra  Crucible  Share. 


12   in $22.  50  I  16    in. 

14   in 24.50  I  18   in. 


$27. 50 

28. 50 

Add  with  Soft  Center  Mould  instead  of  Solid  Mould  $2.00  list  to 
each  size. 

Add  for  Bar  Welded  Share  $2.00  list  to  each  size,  in  both  Solid 
and  Soft  Center  Moulds. 

Deduct  $1.00  list  when  Standing  Coulter  is  substituted  for  Kolling 
Coulter. 

Deduct  if  Gauge  Wheel  not  wanted  $1.50  list. 

Deduct  $2.00  list  if  Fin  Cutter  is  furnished  instead  of  Rolling 
Coulter. 

BBUSH  BBEAKEBS. 

Heavy  Long  Bar  Share,  Strap  under  Beam,  Standing  Coulter, 
Gauge  Wheel,  Solid  Mould  and  no  Extra  Share. 

12  in $25.00 

14  in 27.50 

16  in 30.00 


18  in $33.00 

20  in 37.50 


If  Strap  under  Beam  is  not  furnished  deduct  $1.00  list  each  size. 
If  Soft  Center  Mould  is  furnished  add  $3.00  list  each  size. 


WISCONSIN  BBEAKEBS. 


Wood  Beam,  Solid  Bar  Share,  Standing  Coulter,  Gauge  Wheel, 
Solid  Mould  Board  and  no  Extra  Share. 


12  in $30.00 

14  in 31.00 

16  in 34.00 

18  in 38.00 


20  in $42.00 

22  in 46.00 

24  in 49.00 


Ill 


286 


FABM-MACHINEBY   TRilDE  ASSOCIAnONS. 


U8T  PRICKS  OF  FLOW  PABTS. 
Rboommsndbd  BiAT  8,  1907. 

KXTBA.  BOTTOMB. 


16   in 117. 00 

18  in 19.00 


Extra  Bottoms  for  Stubble  and  Turf  and  Stubble  Walking  and 
Eiding  Plo\vs,  Soft  Center  Mould  and  Share. 

12  in $14.00 

13  In 14.00 

14  in 15.00 

For  Crucible  Mould  Board  deduct  $1.00  list  from  each  size.    For 
Crucible  Share  deduct  50  cents  from  each  size. 

HM-AKirR  BfyrroMs  ix>b  Biniifo  flows,  solid  mould  with  extba  shabb. 


16    in $17.00 

18   in 19.00 


12  In $14.00 

13  in 14.00 

14  in 15.00 

For  Soft  Center  Mould  Board  on  above  add  $2.00  list  to  each  size. 

flow  fixtubes. 

Pin  Cutter  and  Bolt  for  Walking  Plow $1. 00  List 

Steel  Jointer  for  Walking  Plow 2. 50  List 

Chilled  Jointer  for  Walking  Plow ^ 2. 00  List 

Combination  Steel  and  Chilled  Jointer  for  Walking  Plow 2. 25  List 

No  Uniform  list  price  is  recommended  for  the  following  class  of 
plows  for  the  reason  tJiere  seems  to  be  a  varied  equipment,  and 
weight  of  same: 


Township  Road  Plows. 
Railroad  Plows. 
Com  Plowa 
Rod  Breakers. 


Root  and  New  Ground  Plows. 
Potato  Diggers. 
Chilled  Plows. 


LIST  PRICES  OF  HARROWS. 

Recommended  Mat  8,  1907. 

It  is  recommended  to  place  all  Steel  and  Wood  Bar  Harrows  except 
the  Boss  Harrows  on  a  list  price  and  to  quote  net  prices  by  using  dis- 
count from  the  list  the  same  as  is  the  common  practice  in  quoting  net 
prices  on  Walking  Plows. 

PIPE  OB  U  BAB  5  BAIL  STEEL  LEVEB  HABBOW   SECTIONS. 

25  Tooth  5  Bar  Section  Pipe  or  U  Bar  %  in.  T $6. 25 

25  Tooth  5  Bar  Section  Pipe  or  U  Bar  %  in.  T 6. 60 

30  Tooth  5  Bar  Section  Pipe  or  U  Bar  ^^  in.  T 6. 60 

80  Topth  5  Bar  Section  Pipe  or  U  Bar  %  in.  T 7. 00 

35  Tooth  5  Bar  Section  Pipe  or  U  Bar  %  in.  T 7. 30 

35  Tooth  5  Bar  Section  Pipe  or  U  Bar  %  in.  T 7. 75 

For  Bunners  add  40  cents  per  section  list.    Kevised  April,  1908. 
See  below. 
For  4  Rail  Harrows  deduct  40  cents  per  section  list. 
For  Adjustable  Tooth  on  Pipe  Harrow  add  60  cents  per  section  list. 


GUABDED  END  SPBINQ  BELIEF,  STEEL  LEYEB  HABBOW  SECTIONS. 


25  Tooth  %  in.  Teeth $6. 60 

25  Tooth  %  in.  Teeth 7.00 

30  Tooth  %  in.  Teeth 7. 00 


30  Tooth  %  in.  Teeth 

35  Tooth  ^^  in.  Teeth 

36  Tooth  %  in.  Teeth 


$7.40 
7.70 
8.  IS 


« 


EXHIBITS. 


287 


A 


For  Runners  add  40  cents  per  section  list.  Revised  April,  1908. 
See  below. 

For  4  Rail  Harrows  deduct  40  cents  per  section  list. 

Recommended  April  8,  1908. 

Runners. — For  Independent  or  a  One-Piece  Runner — add,  per  sec- 
tion list,  $0.40. 

For  Combination  Runner  and  Tooth  or  Tooth  Socket — charge  op- 
tional. 

Relief  Springs. — Guarded  End  Lever  Harrows  not  Equipped  with 
Relief  Sprmgs,  deduct  from  list  prices  per  section,  $0.20. 

Recommended  May  8,  1907. 

wood  bar   5   RAIL  LEVER   HARROW   SECTIONS — SQUARE  OR   ZIGZAG  OPEN  END. 

5  Foot  Section,  30  Tooth,  %  in.  Teeth $7  OO 

5  Foot  Section,  30  Tooth,  %  in.  Teeth 7.50 

6  Foot  Section,  35  Tooth,  ^  in.  Teeth 7.  70 

6  Foot  Section,  35  Tooth,  %  in.  Teeth 8. 25 

5  Foot  Section,  40  Tooth,  %  in.  Teeth 7. 50 

5  Foot  Section,  40  Tooth,  %  in.  Teeth .__     8.00 

For  Runners  add  40  cents  per  section  list. 
For  4  Rail  deduct  40  cents  per  section  list. 

WOOD  OR  STEEL  BAR  FLEXIBLE  5  RAIL  HARROW  SECTIONS. 

5  Foot  Section,  %  in.  Teeth $7. 50 

6  Foot  Section,  %  in.  Teeth ^ 8. 50 

For  Runners  add  40  cents  per  section  list. 

For  4  Rail  Steel  Bar  deduct  $1.00  per  section  list. 


COMBINATION  EYENEBS  4  AND 


4  Foot  Evener,  1  Section $0. 90 

6  Foot  Evener,  1  Section .  95 

6  Foot  Evener,  1  Section 1. 00 

8  Foot  Evener,  2  Section 1. 65 

10  Foot  Evener,  2  Section 1.  85 

12  Foot  Evener,  2  Section_l__  2. 05 

Recommended  April  8,  1908. 

Three  and  four  section  eveners. — Consisting  of  One  Long  Wood 
Bar  and  Draft  Irons,  Complete. 


5  BAR  HARROWS,  ALL  STYLES. 

12  Foot  Evener,  3  Section.. 

15  Foot  Evener,  3  Section.. 

16  Foot  Evener,  4  Section.. 
18  Foot  Evener,  3  Section.. 
20  Foot  Evener,  4  Section.. 
24  Foot  Evener,  4  Section.. 


$3.00 
3.50 
4.50 
4.00 
6.00 
7.00 


75  Tooth  Evener,  3  Section—      $2. 25 

90  Tooth  Evener,  3  Section..        2.  75 

105  Tooth  Evener,  3  Section..        3. 25 


100  Tooth  Evener,  4  Section..  $3.  50 
120  Tooth  Evener,  4  Section..  5. 00 
140  Tooth  Evener,  4  Section..        «.  00 


Recommended  May  8,  1907. 

steel  lever  harrows — 5  BAR  PIPE  OR  U-BAR  WITH  EVENERS. 


r 

Withiin.t«6th. 

With  1  in.  teeth. 

Comb. 
Evenw. 

With  One 

Piece 
Evener. 

Comb. 
Evener. 

With  One 

Piece 
Evener. 

60  Tooth 

$14. 14 
15.05 
16.65 
2L75 
23.30 
29.50 
25.90 
32.40 
36.20 

114.85 
15.85 
17.55 
22.80 
24.50 
30.90 
27.25 
34.00 
38.00 

60  Tooth 

70  Tooth 

75  Tooth 

S21.00 
22.55 
28.50 
25.15 
31.40 
35.20 

$22.05 
23.75 
29.90 
26.50 
33.00 
37.00 

90  Tooth 

100  Tooth 

105  Tooth 

120  Tooth 

liOTooth 

in 


IH 


2g8  FABM-MACHUSBBY  TBADE  ASSOCIATIONS. 

STEEL  LKVEB  HA1UI0W»— B  BAB  GUABDED  EHD.  8PBING  BELIEF  WITH  EVENEBS. 


fiO  Tooth 

00  Tooth 

TO  Tooth... 

75  Tooth 


Wlfii|ln.t8cth. 


Comb. 
Evener. 


fiO  Tooth. 
100  Tooth. 
106  Tooth. 
120  Tooth. 
140  Tooth. 


til  85 
15.85 
17.45 
22.80 
24.50 
aOiM 
27.10 
34.00 
37.80 


WIthOn« 

Piec* 
Eycdw. 


With  I  in.  tMth. 


Comb. 
EY«a«r. 


322.05 
23.75 
29.90 
26.35 
33.00 
36.80 


i 


tl5.65 
16.65 
18.35 
24.00 
25.70 
32.50 
28.45 
35.60 
39.60 


With  One 

Piec« 
£y«Qer. 


$23.25 
24.95 
31.50 
27.70 
34.60 
38.60 


WOOD    BAIL    LEVEB    HABBOWB.    S    BA»-8QUABE    EKD    OB    MG    BAG    OPEN    EWD    WITH 

EVENEB8. 


60  Tooth,  10  Foot 

70  Tooth,  12  Foot 

JOTooth,  ISFoot 

106  Tooth,  18  Foot 

120  Tooth,  20  Foot. 


With  I        With! 
liLtMQL    in.  teeth. 


115.86 
17.45 
24.50 
27.10 
34.00 


116.85 
18.55 
26.00 
28.75 
36.00 


140  Tooth,  24  Foot.. 

80  Tooth,  10  Foot.. 

120  Tooth,  15  Foot.. 

160  Tooth,  20  Foot.. 


With* 
in.  teetn. 


137.80 

16.85 
26.00 
36.00 


With  I 
in.  teeth. 


|4a00 
17.85 
27.50 
3a  00 

1 


WOOD  OB  STEEL  BAIL  FLEXIBLE  HABBOWS  WITH   EVENERS,   5  BAB. 


With  i  in.  teeth. 

10  Foot $16.85 

12  Foot 19-^ 

16  Foot 26.00 


With  i  in.  teeth. 

18  Foot $29.50 

20  Foot 36.00 

24  Foot 41.00 


DISC  HAKROWS— CLASSITICATION  AND  EQUIPMENT. 
RBOOlilf ENDED  JUNB  12,  1907.  i     t»i     j 

Basic  disc  harrow  shall  consist  of  Single  Lever,  16-mch  Blades- 
no  Weight  Boxes,  Neck  Yoke  or  Stay  Chains. 

4  and  5  foot  equipped  with  2-Horse  Eveners.  . 

6  foot  and  larger  equipped  with  3-Horse  Eveners  with  Set-Over 

Irons  or  4-Horse  Eveners.  j  /^« 

The  following  to  be  considered  as  extras  and  always  charged  for 

when  furnished: 


Set-Over  Irons  with  4-Horse  Hitch. 
Tongue  Truck  or  Fore  CJarriage. 
6-Horse  Hitch. 
Center  Cut  Attachment 


Double  Lever. 
Weight  Boxea 
Keck  Yoke. 
Stay  Chains. 


It  is  further  recommended  that  the  minimum  differences  m  prices, 
all  sizes,  be  as  follows: 

BIZB  OF  DI8C0. 

18-in.  Blades  for  4  and  5-ft.  widths,  $1.50  net  more  than  16-in. 

^^  18^ki.  Blades  for  6-ft  width  or  more,  $2.00  net  more  than  16-in. 

^^20-L  Blades  for  4  and  S-ft.  widths,  $3.00  net  more  than  16-in. 

^^20^  Blades  for  6-ft  width  or  more,  $4.00  net  more  than  16-in. 
blades. 


BXHIBITS. 


WIDTH  OF  CUT. 


289 


$1.00  net  additional  between  4  and  5-ft.  Harrows. 
2.00  net  additional  between  6,  6,  7  and  8-ft  Harrows. 
2.60  net  additional  between  8,  9  and  10-ft.  and  larger  Harrows. 
It  is  recommended  that  all  Disc  Blades  may  be  polished  on  the 
Concave  side  only  at  no  additional  charge. 

It  is  recommended  that  the  price  of  $1.00  net,  be  made  on  Plow 
Cut  Disc  Harrows  over  the  Solid  or  Concave  Blades  in  all  sizes. 
Also  this  style  of  Harrow  be  made  in  16-inch  Blades  only. 
Recommended  Apbil  30,  1909. 

That  the  above  clauses  pertaining  to  Plow  Cut  Discs  be  rescinded 
on  account  of  one  member  making  Plow  Cut  Discs  a  specialty  and  at 
about  the  same  cost  as  the  Solid  Discs. 

It  is  recommended  that  the  price  of  Cut  Out  Disc  Harrow  to  be 
12J  cents  net  per  blade,  more  than  solid  or  concave  blades. 

Recommended  April  30,  1909. 

That  the  minimum  net  differences  in  prices  for  Cut  Out  Disc 
Harrows  over  Solid  or  Plain  Disc  Harrows  be  changed  to  read  as 
follows : 


4  Foot 

5  Foot 

6  Foot 

7  Foot 


$0. 50 

0.75 

1.00 

1.25 


8  Foot 

9  Foot 

10  Foot 


$1.  50 

1.75 

2.00 


It  is  understood  that  an  exception  will  be  made  for  Disc  Harrows 
so  constructed  that  it  is  necessary  to  furnish  them  with  Double  Lever 
and  Weight  Boxes;  then  the  price  may  be  made  to  include  these 
extras,  but  in  all  other  cases  Disc  Harrows  should  be  priced  without 
these  parts. 

cultivatobs. 

Recommended  June  12,  1907. 


BASIC   SHOVEL   CULTIVATOB- 


-WALKINQ  AND  BIDING — TO  BE  4   SHOVEL,  BTEEL  BEAM, 
PIN   BBEAK. 


Classification. 


1.  Walking  tongue,  with  rigid  or  adjustable  arch, 

straight  axle  or  balance  frame. 

2.  Walldng  tongueless,  with  rigid  or  adfustable 

arch,  with  or  without  spring  lift. 

3.  Straight  Rider,  Hammock  seat,  rigid  or  pivot 

tongue. 

4.  Straight  Rider,  pivot  axle , 

6.  Straight  Riding  surface 

e.  Foot  Shift  or  Foot  Guide  Riding,  rigid  or  pivot 

tongue. 

7.  Straight  combined  Riding  and  Walking,  strad- 

dle seat,  rigid  or  pivot  tongue. 

8.  Two  Row  with  rigid  tongue , 

9.  Two  Row  with  pivot  axle , 

10.  Disc,  rigid  or  pivot  tongue , 

11.  Single  Row  sled  lister 

12.  Single  Row  wheellister , 

IS.  Double  Row  wheel  lister 

14.  Double  Row  wheel  lister  with  high  frame  (or 
three  times  over). 


Equipment. 


1.  Neck  yoke,  hitch,  shovels,  wrench,  shields  and 

handles. 

2.  Hitch,  shovels,  wrench,  shields  and  handles. 

3.  Neck  yoke,  hitch,  shovels,  shields  and  wrench. 

(No  spreader  arch.) 

4.  Neck  yoke,  hitch,  shovels,  shields  and  wrench. 

5.  Neck  yoke,  hitch,  wrench,  shields  and  levelers. 

6.  Neck  yoke,  hitch,  shovels,  wrench  and  shields. 

7.  Neck  yoke,  hitch,  wrench,  shields,  shovels  and 

handles. 

8.  Three  horse  hitch,  two  neck  yokes,  wrench,  shov- 

els and  shields. 

9.  Three  horse  hitch,  two  neck  yokes,  wrench,  shov- 

els and  shields. 

10.  Neck  yoke,  hitch,  wrench  and  shields. 

11.  Regular. 

12.  Two  discs,  two  shovels,  two  horse  hitch  and  neck 

yoke. 

13.  Four  discs,  four  shovels,  shields,  two  two-horae 

hitches  and  two  neck  yokes. 

14.  Same  as  No.  13. 


68248''— 15 ^19 


Ill 

I 


IH 
II 

nil 


290 


FAJIM-MACHINBBY  TRADE  ASSOCIATIOlfB. 


The  following  to  be  considered  as  extras  and  always  charged  for 

when  furnished: 

MoMtKwrd  Tnming  Shovela 

Spring  Trip  Legs. 

Oopber  Blades. 

HmiBg  SboTela 

Bull  Tongnea 

Pipe  Beams. 

Surface  Gangs. 

It  is  further  recommended  that  the  minimum  net  differences  in 

prices  be  as  follows: 


Oanopy  Tops. 

Levellers  for  Disc  Cultivators. 
Lister  Bars  for  Disc  Cultivators. 
Pivot  Pole,  or  Pivot  Pole  Attachment 
Handles,  with    Hammock    Seat,  Foot 
Shift  or  Two  Bow. 


Spring  trip  over  pin  break 
(per  leg) I0.87J 

Pivot  pole  or  pivot  attach- 
ment     1.00 

Lister  bars  on  disc  cultivator-.      .  60 


6  shovel  over  4  shovel $1. 00 

8  shovel  over  4  shovel 2. 00 

Eagle  Claw  over  4  shovel 1.00 

8   Tooth    Spring   Tooth    Gang 

over  4  shovel 1.50 

10  Tooth  Spring  Tooth  Gang 

over  4  shovel 2. 00 

It  is  understood  that  Spreader  Arches  be  considered  a  part  of  the 
regular  equipment  of  Combined  Riding  and  Walking  Cultivators, 
Pivot  Axle  Cultivators,  Crank  Guide  Cultivators  and  Two  Row  Cul- 
tivators, and  a  reduction  of  fifty  cents  each  can  be  allowed  when 
these  arches  are  not  furnished,  excepting  on  the  Crank  Guide  Culti- 
vators, when  they  are  also  equipped  with  return  springs,  then  they 
are  to  be  considered  as  extras  and  a  charge  of  fifty  cents  made  for 
them. 


BIDING  FLOWS. 


BXCOMMENDED  AFBII.  8,  1908. 


Oaaslflcatkn. 


1.  Sulky  Fknir,  Low  Lift,  Fk»mele88,  no  Pole. 


1  flolkf  Ptoir,  HiKh  Lift,  wtth  Rrnmo  and  Polo. 


a  a««Plinr,  Low  Lift,  FnuMtai,ntFoit.. 


Equipment 


C  Grag  Plow,  High  lift,  wflh  FMone  tnd  Pole. 


16  Inch  Bottom,  Seat,  1  Land  Wheel,  2  Furrow 
Wheels,  3-horse  Evener,  Weed  Hook.  16  inch 
Rolliiu;  Coulter,  Senper  far  rear  Wheel  and  flat 
W  rPTM^h* 

16  inch  Bottom,  Seat,  1  Land  Whed,  2  Furrow 
Wheels,  S-horse  Evener,  Nedcyoke,  Weed  Hook, 
15  faich  RoUlnff  Coulter,  Scraper  for  rear  Wheel, 
and  flat  Wrencn. 

Two  14  inch  Bottoms,  Seat,  1  Land  Wheel,  2  Furrow 
Wheels,  4-horae  Evener,  2  Weed  Ho<^  two  15 
inch  Rolling  Coulters,  Scraper  for  rear  Wheel,  and 
flat  Wrench. 

Two  14  inch  Bottoms,  Seat,  1  Land  Wheel,  2  Furrow 
Wheels,  4-hor9e  Evener,  Neckyoke,  two  15  Inch 
Rolltaig  Coulten,  3  ^««<1  Hooks,  Scraper  for  rear 
Wheel  and  flat  wrench. 


It  is  recommended  that  when  the  following  Equipment  is  furnished 
with  Biding  Plows,  the  ADomoNAL  list  prices  be  as  Follows: 


Pole  Attaduneiit  for  Low  lift  Sulky  or  Gang. 

Front  Fnrrow  Wlieel  Scraper 

Jointer,  Steel 
Jointer,  Cast  Iron. 


$8.00 

.  60 

3.00 

2. 60 

Umbrella  or  Sunshade,  Complete 3. 00 

Four-Horse  Evener  over  S-Horse  for  Sulky 2.00 

MT^-Horse  Abreast  or  Stnmg-out  Evener  Over  4-Hor8e  for  Gang 3.00 

Five-Horse  Strang-out  Bvaier,  less  Lead,  Doubletree,  over  4-Hor8e  for 

Q«iig 2.00 

Sfz-Horse  Bvener  over  4-Horse  for  Gang 4-  00 

Ifactra  Heairy  Beams  for  Gang  Plow _— **  00 

Sw«ep  Attachment  for  Low  Lift  Sulky 3. 00 

WMle  Breaker  Attachment  for  Low  Lift  Sulky 


f> 


291 

Riding  pix)w8  equipped  with  Black  Land,  Sandy  Land,  or  Breaker 
Bottoms,  REGULAR  WITH  EXTRA  soMD  SHARES  (the  Same  as  Walking 
Plows).  * 

listing  plows. 
Recommended  April  8,  1908. 


Claasifloation. 


1.  Walking  Lister.  MIn.  S.  C.  Steel  Bottom 

2.  Walking  Combmed  Lister,  14  in.  S.  C.  Steel  Bot- 

tom. 


8.  Two  Wheel  Sulky  Lister,  14  in.  S.  C.  Steel  Bot- 
torn. 


4.  Foot  Wheel  Sulky  Lister,  with  14  in.  8.  C.  Steel 
Bottom. 


i.  ToogoelesB  Lister,  with  foor  wheels  and  14  in. 
8.  (3.  Steel  Bottom. 


•■  ^  ^^  ^"^  I'*'***  ^^  *wo  14  in.  8.  a 
Steel  Bottoms. 


Equipment. 


Sub-soil  Attachment. 

Subsoil  Attachment,  Indn)endent  Drill  Attach- 

paent,  Covering  Shovels.  6  Plates  (Including  one 

•  m  Machine  and  one  blank).  Root  Cutter  and  small 
Wrench. 

Drill  Attachment,  13  or  14  faich  Rolling  Coulter. 
Covering  Shovels,  Sub-sofler,  Seat,  Pole,  4-Hoi8e 
Evener,  Neckyoke,  6  Hates  (including  one  in 
Machine  and  one  blank).  Root  Cutter  and  Flat 
Wrench. 

Drill  Attachment,  13  or  14  inch  RolUng  Coulter, 
Sub-eoller,  Shovel  or  Knife  Coverers.  Pole,  4- 
Horse  Evener,  Neckyoke.  6  Plates  (induding  one 
in  Machine  and  one  blank),  rear  Wheel  Scrapers. 
Root  Cutter  and  flat  Wrench. 

Drill  Attachment,  13  or  14  hich  Rolling  Coultw, 
Sub-soiler,  Shovel  or  Knife  Coverers,  4-Hotse 
Evener,  6  Plates  (includuig  one  hi  Machine  and 
one  blank),  rear  Wheel  Scrapers,  Root  Cutter  and 
flat  Wrench. 

2  Drill  Attachments,  two  13  or  14  inch  Rolling  Coul- 
ters, Seat,  2  pairs  Shovel  or  Knife  Coverers,  2  Sub- 
soilers,  6-Horse  Evener,  Pole,  Neckyoke,  12  Plates 
(including  two  in  Mft/>hinfi  and  two  blank),  and 
flat  Wrench. 


It  is  recommended  that  when  the  following  special  equipment  is 
furnished  with  plows,  the  additional  list  prices  be  as  follows : 

1.  Pole  for  Tongueless  Lister not  less  than  $3.00  each 

2.  Disc  Coverers: 

10  inch  and  under "      «        «      lqq   pair 

over  10  inches «      ««        «<      2.OO    " 

8.  Cotton  Planter  Attachment ZZHIl  "      "        "      2.00  each 

It  is  further  recommended  that  when  the  following  Parts  are  not 
furnished  with  plows,  the  maximum  deduction  in  list  prices  be 
as  follows: 

Sub-soiler  Attachment ^^^  g^^jjj 

Solid  Steel  Shares  in  place  of  Soft  Center  Steel  SharesIZIZZZIIIIII    1.00     •• ' 


DISC  PLOWS. 


Rboommehdid  Apszl  8,  1908. 


Classification. 


1.  Sulky 

2.  Two  Furrow  Gang... 
S.  Three  Furrow  Gang. 
4.  Four  Fnrrow  Gang. . 


Equipmoit. 


24  fa.  Disc.  3-Horse  Evener,  Disc  Scraper  or  Cleaner 

and  Wrench. 
Two  24  in.  Discs,  4-Horse  Evener.  Disc  Scrapers  or 

Cleaners  and  Wrench. 
Three  24  m.  Discs,  4-Horse  Evener,  Disc  Scrapen 

and  Wrench. 
Four  24  fa.  Discs,  6-Horse  Evener  Disc  Senders  or 

Cleaners  and  Wrench. 


jSVjS 


VABM-MAOHIirEBY  TRADE  ASS00IATI0K8. 


EXHIBITS. 


1 


11 


It  is  recommended  that  when  the  following  equipment  is  furnished 
with  Plows,  the  additional  list  prices  be  as  follows : 

Weed  Hooks ^ch  $  .  50 

Plows  with  26  inch  Disc extra  per  disc  1.00 

Cast  Iron  Wlieel  Weiglits per  pound  .06 

4-Horse  Evener  over  3-Horse  for  Sulky extra,  each  2, 00 

5-Horse  Abreast  or  Strung-out  Evener  over  4-Horse  for  Gang__extra,  each  3. 00 
S-Horse   Stmng-out   Evener,   less   Lead  Doubletree,   over  4-Horse   for 

Qang      extra,  each  2. 00 

e-Horse  Eve'neroveri-Horsefor  Two  or  Three  Furrow  Gang— extra,  each  4. 00 

ROD  BREAKING  FLOWS. 


Classificfttkm. 


1.  Rod  Breaking  Plows,  with  Steel  Beam,  and  Fin 
Cutter  attached  to  Bottom. 


Equipment. 


Extra  Share  with  Fin  Cutter,  Gauge  Wheel  or 
Gauge  Shoe. 


CORN  PLANTERS  AND  DRILLS. 


Becommende3>  April  8,  1908. 


Classification. 


1.  Corn  PlanUsr,  a-Row,  with  combined  check 
Rower  and  DrllL 


%  Com  Planter,  9-Row  with  Drill,  lets  Cheek  Rower. 


n.  Com  Planter,  a-Row,  with  Check  Rower-Full 
HUl  Drop  (no  Drill}. 


4.  Com  Drill,  3  Row. 


Equipment 


§,  Com  Drill,  2 Row  Edge  Drop. 


«.  Combined  Cora  and  Cotton  Planter,  2  Row  with 
Check  Rower  and  DrilL 


7.  Combined  Cotton  and  Com  2  Row  Drffl. 


Pole,  Seat,  1  pr.  30  in.  Wheels  with  open  or  concave 
Tire,  set  for  3'-2",  3'-4",  3'-0",  3'-8"  or  3'-10",  5 

S'S.  Plates  (including  one  in  Machine),  1  Marker 
ope,  4  extra  links  Drive  Chain.  80  Rods  C.  R. 
S'-a*',  3'-4",  3'-6",  3'-8".  or  3'-10"  Wire,  6  extra 
Open  Links  for  C.  R.  Wire,  1  C.  R.  Rope,  1  pr. 
Steel  Stakes  for  C.  R.  Wire,  one  plain  Wrench 
(not  Monkey).  ^ 

Pole.  Seat,  l  pr.  30  in.  Wheels,  with  open  or  Con- 
cave Tire,  set  for  3'-2",  3'-4",  3'-6",  3'-8^',  or  3'-10", 
6prs.  plates  (including  one  in  Machine).  1  Marker 
Rope.  4  extra  links  Drive  Chain ,  one  Plain  Wrench 
(not  Monkey).  ^ 

Pole.  Seat,  1  pr.  30  in.  Wheels,  with  open  or  Con- 
cave Tire,  set  for  3'-2",  3'-4",  3'-6",  3'-S",  or  3'-10", 
8  prs.  Plates  (including  one  in  Machine),  1  Marker 
Rope,  4  extra  links  Drive  Chain,  80  Rods  C.  R. 
Wfre,  3'-2",  3'-4",  3'-6",  3'-8",  or  3'-10",  6  extra 
open  Links  for  C  R.  Wire,  I C.  R.  Rope,  1  pr.  Steel 
Stakes  for  C.  R.  Wire,  one  Plain  Wrench  (not 
Monkey). 

Pole,  Seat,  1  pr.  30-ln.  Wheels  with  open  or  Concave 
Tire,  3  prs.  Plates  (including  one  in  Machine),  1 
Marker  Rope,  4  extra  Links  Drive  Chain,  erne 
Plain  Wrench  (not  Monkey). 

Pole,  Seat,  1  pr.  30-in.  Wheels  with  open  or  Ckmcave 
Tire,  5  prs.  Plates  (Including  one  in  Machine),  1 
Marker  Rope,  4  extra  Links  Drive  Chain  and  one 
Plain  Wrench. 

Pole,  Seat,  1  pr.  30-ln.  Wheels  with  open  or  Concave 
Ti^e  set  for  3'-2",  3'-4",  3'-6",  3'-8",  or  3'-10",  5 

Srs.  Plates  (including  one  in  Machine),  Ipr.  Cotton 
gitator  Plates,  6  extra  open  Links  for  C.  R.  Wire, 
1 C.  R.  Rope,  1  pr.  Steel  Stakes  and  1  plain  Wrench. 
Pole,  Seat,  1  pr.  30-in.  Wheels  with  open  or  Concave 
Tire,  4  prs.  Plates  (including  one  in  machine),  1 
pair  Cotton  Agitator  Plates,  1  marker  Rope,  4 
extra  Links  Drive  Chain  and  one  Plain  Wrench. 


♦li 


293 


It  IS  recommen(ied  that  when  the  following  special  equipment  is 
furnished  with  Planters  and  Drills,  the  additional  list  prices  be  as 
follows : 


(( 


u 


tt 

« 

M 
4( 


Fertilizer  Attachments |20. 00  each 

Drill  Attachment 4.  (X) 

Fodder  Attachment I__II      S.  00 

Hand  Drop  Attachment  including  seat — changed  April  30,  '09  from 

$1.00  to 2. 00 

Disc  in  place  of  regular  Runners 2. 00 

Disc  Furrowers g.  00 

Shovel  Furrowers 3.  OO 

Coverers  4. 00 

Combined  Furrowers  and  Coverers 4.00 

Gauge  Shoes  for  Runners 1.50 

1  pr.  Special  Plates  for  Broom  Com 

1  pr.  Special  Plates  for  Kaffir  Corn 

f  pr.  Special  Plates  for  Sorghum 

1  pr.  Special  Plates  for  Milo  Maize 

1  pr.  Special  Plates  for  Millet 

1  pr.  Special  Plates  for  Peas 

1  pr.  Special  Plates  for  Beans 

Two-Horse  Evener  and  Neckyoke list  $2.  00  each 

Planters — with  Wheels  over  30  in.  in  diameter list    4. 00     *' 

Pincers . Ust      .  50  pair 

It  is  further  recommended  that  when  the  following  are  not  fur- 
nished with  Planters,  the  maximum*  deduction  in  list  prices  be  as 
follows: 

Check  Rower,  Complete |io.  00  each 

Check  Rower,  and  all  parts  stripped  to  make  "  Com  Drill "  only 14.  00     *• 

COTTON  PLANTERS  AND  DRILLS. 
Recommended  Apbil  8, 190S. 


Changed  4-30-09  from 
$1.00  to  60c  per  pair, 
list 


Classification. 


1.  One  Row  Corn  Drill  Steel  Frame  and 

Hopper  with  Cover,  Chain  or  Gear 
Drive. 

2.  One-Row  Corn  DrilJL  Steel  Frame 

and  Hopper  with  Cover,  Chain  or 
Gear  Drive. 

3.  One-Row  Steel  Frame  Cotton  and 

Corn  Plantar,  Chain  or  Gear  Drive. 

4.  Two-Horse    One-Row    Cotton   and 

Corn  Planter. 


Rectnnmended  Tune  16, 1909. 


Equipment. 


Opening  Shovel,  1  pr.  Covering  Shovels,  4  Plates  (including  on* 
in  Machine),  and  small  Wrench. 

Runner  or  Sword  Opener,  1  pr.  Covering  Shovels,  4  Plates  (in- 
cluding one  in  Machine),  and  small  Wrench. 

steel  Hopper  or  Box,  4  Corn  Plates  (Including  one  in  Machine), 
1  Cotton  Agitator  Plate  and  small  Wrench. 

2  Wheels,  Seat,  Pole,  Steel  Seed  Box,  with  Open»  or  Seed 
Shovel,  2  rear  Covering  Shovels,  Front  Shank  or  Standard 
with  Wood  Break  Pin  lor  Middle  Breaker  or  Sweep,  4  Com 
Plates  (including  one  in  Machine),  1  Cotton  Agitator  Plate, 
flat  Wrench. 
Add  Evener  and  Neckyoke. 


It  is  recommended  that  when  the  following  equipment  is  furnished 
with  Drills  or  Planters,  except  two  horse  one  row  C.  &  C.  Planter, 
the  ADDITIONAL  LIST  PRICES  be  as  follows : 

Gauge  Shoe  for  Drills $0. 50  each. 

Wide  or  Open  Tire  Drive  Wheel .  50  " 

Cast  Iron  Roller  Attachment  for  1-Horse  Machine 2. 00  " 

Fertilizer  Attachment  for  1-Horse  Machine 6. 00  " 

Extension  Hoppers .  50  »• 

Spring  Trip  Standards  for  2-Horse  Planter 1.  50  •* 

Two-Horse  Evener  and  Neckyoke 2. 00  ** 


I 


l< 


im 


HI 


li 


2v« 


VABM-lCAOmKSET  TRMUm  A8800UII0N8. 


STALK  CUTTEBS. 


Rbcommkhvid  Afbil  8, 1908. 


nnmilflrtitlffli 


L  Stelk  Cmm,  Sinsto Row.. 
&  BtMSk  CaUm,  Doobto  Bow. 


EqaipnuQt 


Ftvt  KaiTtB  «ad  SmaU  flat  Wrench.  (No  Eyvur 
orNeekyoka.)  ..   ^    ^ 

T«a  Knives.  3-Borsa  Evenv,  3  NackyokM,  and 
SmaU  Oat  Wraacii. 


It  is  recommended  that  when  the  following  equipment  is  furnished 
with  Stalk  Cutters,  the  additional  list  prices  be  as  follows : 


Additional  KnlTes  for  Single  Row 

*•  "  Double    "   

Two-Hone  Brener  and  Neckyoke  for  Single  Row . 


per  knife  ILOO 

2.00 
2. 00 


REVISED  LIST  PRICE  OF  EXTRA  PLOW  SHARES. 

CAdopted  AafQSt  25,  1908.    Effectlre  Sprinf  Trade  1910  or  Earlier.) 

101  MWBUt  BKKAinnt  PLOWg. 

Jfationai  Plow  i.M'fi  fieHee. 


9  Incb 

10  inch 


12  inch 


12.00 

2.90 

2.50 


14  inch 

16  inch 


FOB  LXanifQ  FLOWB. 


14  Inch  Mild  ... 
16  Inch  Mild 


$2.76 

3.25 


Hard..... 
Hard 


12.75 
3.25 


$4.00 
4.50 


For  Stubble 

Sandj  Land 
Mixed  Land  and 


BOLIO  OB  MILD  TEMPEBED  BUF  8HABB8 

Tarf  and  Stubble 
Black  Land 
Blue  Bird 


SERIES  OF  WALKING  AND  BIDINQ  FLOWS. 


7  inch $1.10 

7i  inch 1.10 

8  inch 1. 10 

81  inch 1-  25 

9  inch 1. 35 

9i  inch 1. 45 

10  inch 1.60 


11  inch 

12  inch 

13  inch 

14  inch 

15  inch 

16  inch 

18  inch 


$1.76 
2.00 
2.00 
2.50 
3.00 
3.00 
3.50 


CULTIVATOR  SHOVELS. 


Recommended  Apbil  8,  1908. 


ODlttrator  Gaofi. 


L  Four  Sbovd— far  NorttMcm  tsrttory. 
1  WwB  Shovd'for  Soathara  tcrtlory. 


S.  Six  Shovel.... 
4  EaglaClaw... 
g,  Spring  Tootb. 


DflBcr^tlon  of  Shovels.    Hard  or  MOd.    Straight 
or  Twisted. 


Four— 5  inches  wide  or  nnd«  by  11  tBohes  kog  «r 

under. 
Two-5  Inches  wide  or  under. 
Two-Spedal  Wing. 

All  11  inches  long  or  onder. 
Six— 3i  inches  wide  or  onder  by  •  IndieB  long  or 

onder. 
Eight— 3  inches  wide  or  onder  by  9  Incbea  Vang  or 

onder. 
8  biches  wide  or  nnder. 

by  6  inches  long  or  onder,  Single  Point 
by  8i  inches  long  or  onder,  Double  Point 


EXHIBITS.  295 

It  is  recommended  that  the  additional  list  prices  per  cultivatoe 
for  all  shovels  in  excess  of  above  dimensions  be  as  follows : 

For  Four  and  Six  Shovel  Cultivators $0. 50  per  set,  list 

For  Eagle  and  Spring  Tooth  Cultivators 1. 00  per  set,  list 

N.  B.    The  width  to  be  measured  at  top  of  shovel. 

CULTIVATOR  WHEELS. 


Coltivators. 

Desoription  of  tire. 

Walking  Cultivators 

U  inch  TirA  or  nnder 

RldiUR  Cultivator 

2   inch  Tire  or  under. 

Two  Row  Cultivators 

3  inch  Tire  or  undn* 

It  is  recommended  that  the  additional  list  prices  for  all  Wheels 
with  Wider  Tire  than  specified  above  be  as  follows : 

Walking  Cultivators,  for  each  additional  J  inch  in  width,  50  cents 
per  Cultivator,  list. 

Riding  Cultivators,  for  each  additional  J  inch  in  width,  $1.00  per 
Cultivator,  list. 

It  is  also  recommended  that  the  Maximum  Width  of  Tire  for 
Walking  Cultivators  be  2  inches. 

standard  dimensions  of  common  parts, 
finished  neck  yokes. 
Adopted  Maboh  10,  1909. 


Pattern  No.  1 \   2  6/16  in',  centerinmi  I  ^°'     sulky 


I 
[ 


1% 


in.  ends.. 


42  in.  long 1  Fob  walking,  biding  and 

Pattern  No.  2 {   2  5/16  in.  center >     disc    cultivatobs    and 

1%        in.  ends ^J     listing  flows. 

bingletbees. 


1 
;1 


AND      QANO 


plows. 


Adopted  Maboh  10,  1909. 

No.  1  singletree — for  cultivators, 

1%  in.  thick  X  2%  in.  wide— 26  in.  Finished, 
or  1%  in.  thick  x  2%  in.  wide— 27  in.  Rough. 

No.  £  singletree — for  plows  and  harrows, 

1%  in.  thick  x  2      in.  wide— 27  in.  Finished. 
or  2      in.  thick  x  2%  in.  wide— 28  in.  Rough. 


Adopted  Afbil  14, 1909. 


YELLOW  pine  POLES. 


Fob  Sulky 
Gang 

COBN 

Stalk 
Walking 
Riding 
Disc 


Plows 

Plows 

Plantebs 

Cuttebs 

cultivatobs- 
Cultivatobs- 
cultivatobs. 


Two  Row  Cultivatobs. 


Rough  Purchase  Sizes. 
(Two  Poles  in  one  piece.) 

3  in.  X  6  in.,  12  feet 

18  feet  in  one  piece  or 
9  feet  in  one  pole. 


FobDiso 


Habbows 


-I 


3  in.  X  7  in.,  12  feet. 

21      feet  in  one  piece,  or 

lOV^  feet  in  one  pole. 


ihi 


li 


I 


296  FABM-MAOHINEBY  TRADE  ASSOCIATIONS. 

National  Plow  Association. 

MST  of  officers  AND  EXECUTIVE  COMMITTEES. 

Fob  1907-1908. 

Oiflcers, — J.  A.  Craig,  president,  Janesville,  Wis.;  Wm.  H.  Taylor, 
vice  president,  Peoria,  ill.;  W.  B.  Brinton,  treasurer,  Dixon,  111.; 
C.  E.  Sanders,  secretary,  Chicago,  111. 

Executive  committee, — Wm.  Butterworth,  Moline,  111.;  G.  A. 
Stephens,  Moline,  111. ;  W.  H.  Parlin,  Canton,  111. ;  C.  S.  Branting- 
ham,  Rockford,  111.;  H.  M.  Wallis,  Racine,  Wis.;  C.  F.  Huhlein, 
Louisville,  Ky. ;  J.  A.  Craig,  Janesville,  Wis. 

Fob  1908-1909. 

OUtcers. — C.  S.  Brantingham,  president,  Rockford,  111. ;  C.  E.  Gilt- 
ner,  vice  president,  Racine,  Wis.:  A.  J.  Brosseau,  treasurer,  Albion, 
Mich. ;  C.  E.  Sanders,  secretary,  Chicago,  111. 

Executive  committee, — Wm.  Butterworth,  Moline,  111.;  G.  A. 
Stephens,  Moline,  111. ;  W.  H.  Parlin,  Canton,  lU. ;  C.  F.  Huhlein, 
Louisville,  Ky. ;  W.  I.  Bogardus,  Rock  Island,  111. ;  Wm.  H.  Taylor, 
Peoria,  111. ;  W.  B.  Brinton,  Dixon,  111.;  J.  A.  Craig,  Janesville,  Wis. ; 
C.  S.  Brantingham,  Rockford,  111. 

F6b  1909-1910. 

Oiflcera, — ^Wm.  Butterworth,  president,  Moline,  111. ;  H.  C.  Rob- 
erts, vice  president,  Peoria,  lU.;  T.  Y.  Davis,  treasurer.  Sterling,  111.; 
C.  E.  Sanders,  secretary,  Chicago,  111. 

Executive  committee, — ^W.  H.  Parlin^anton,  111.;  C.  S.  Branting- 
ham, Rockford,  111. ;  W.  B.  Brinton,  Dixon,  IQ. ;  Wm.  H.  Taylor, 
Peoria,  111.;  A.  Hirshheimer,  La  Crosse,  Wis.;  H.  M.  Wallis,  Racine, 
Wis. ;  J.  F.  Lardner,  Rock  Island,  111. ;  A.  J.  Brosseau,  Albion,  Mich. ; 
Wm.  Butterworth,  Moline,  111. 

.    STANDING  COMMITTEES  FOB  1909-1910. 

Oast  committee, — G.  W.  Crampton,  chairman ;  H.  M.  Wallis,  XJ.  G. 
Orendorff,  T.  P.  Luby,  C.  S.  Brantingham. 

Freight  transportation  committee, — C.  B.  Gregory,  chairman; 
A.  R.  Ebi,  W.  J.  Evans. 

Legislation  committee, — ^U.  G.  Orendorflf,  chairman ;  Wm.  Butter- 
worth, W.  B.  Brinton. 

Membership  committee. — J.  A.  Craig,  chairman;  E.  O.  McLean, 
A.  J.  Street,  A.  J.  Brosseau,  W.  W.  Wiard. 

Standard  equipment  committee, — A.  J.  Brosseau,  chairman;  F.  J. 
Savage,  U.  G.  Ciendorff,  R.  C.  Anderson,  Wm.  Black,  A.  J.  Street, 
T.  P.  Luby.  

Exhibit  19. 

BEPOBT  OF  COMMITTEE  ON  SHOP  COSTS  ANB  SELLINa  EXPENSES, 
TO  NATIONAL  ASSOCIATION  OF  THBESHEB  MANX7FACTI7BEBS, 
AVOVST,  1904.' 

Your  committee  would  respectfully  report  that  they  have  taken  up 
the  cost  of  manufacturing  engines,  separators  and  parts,  and  the  ex- 

1  See  text  (p.  56)  for  reference  to  subsequent  amendments  to  this  report 


EXHIBITS.  297 

pense  of  marketing  the  same.  They  have  also  made  comparisons  of 
machinery  and  costs  a]jd  taken  into  consideration  the  various  sizes 
and  kinds  of  threshing  machinery. 

That  after  full  investigation  of  the  same,  it  is  the  opinion  of  your 
committee  that  the  machinery  can  not  be  manufactured  and  put  on 
the  market,  paymg  cost  of  selling  at  less  than  so  that  they  each  shall 
net  the  manufacturer  the  amount  hereinafter  set  forth. 

The  results  of  cash  sales,  single  or  in  large  quantities  and  time 
sales,  have  been  taken  into  consideration.  A  cash  sale  requires  no 
additional  expense. 

These  amounts  are  not  reported  as  a  price^  as  each  manufacturer  is 
free  to  fix  and  settle  on  his  own  lists  and  selling  price,  without  limita- 
tions, and  are  not  governed  by  this  Association. 

,  These  amounts  are  found  by  your  committee  after  comparisons 
made  of  kind  and  sizes  of  goods  and  their  knowledge  of  costs  of 
manufacture  and  expenses  of  selling  and  making  collections,  and 
trust  may  be  of  value  and  of  aid  to  each  of  us. 

The  commissions  allowed  for  selling  have  not  been  added.  We 
believe  that  the  net  results  of  each  sale  would  require  an  amount  equal 
to  the  amount  quoted  by  us,  in  order  to  obtain  a  reimbursement  for 
the  expense  of  manufacturing  and  selling,  and  that  to  sell  below  the 
amounts  would,  in  many  cases,  result  in  a  loss.  These  figures  are 
given  for  what  they  may  be  worth,  and  can  be  used  or  not  as  each 
manufacturer  may  determine,  each  being  free  to  act  and  settle  his 
price  list  as  he  deems  best. 

The  cost  of  engines  and  separators  of  other  sizes,  we  believe  to  be 
between  the  figures  of  the  size  named  next  above  and  below. 

freight. 

In  making  estimates  we  have  assumed  that  customer  pays  freight 
from  factory.  There  would  be  no  leeway,  but,  on  the  contrary,  a  loss, 
if  freight  was  allowed  west  of  the  Mississippi  River. 

transportation  of  customers. 

We  have  made  no  allowance  for  cost  of  transportation  of  customers 
to  factory  or  Branch  House.  This  would  be  an  additional  burden, 
and  such  expense  ought  not  to  be  allowed  by  any  manufacturer. 

NET  RESUIiTS  OF  SALES. 
PLAIN   SEPARATORS,   WITHOUT  FOLDING   STACKER  AND   HAND  FEED  ATTACHMENT. 

(TlM«AU  Cash"  column  is  inteaded  to  mean  where  an  agent  cashes  all  sales  made  during  tha  season  and 

where  it  amounts  to  two  or  more  outfits  or  machines.) 


Sise  Separator. 


24x40. 
28x40. 
28x48. 
30x43. 
30x44. 
30x48. 
30x50. 
32x48. 
32x62. 
33x52. 
33x53. 
33x5f.. 
36x52. 


Time. 


S340.00 
357.00 
366.00 
366.00 
366.00 
374.00 
383.00 
383.00 
395.00 
400.00 
400.00 
425.00 
404.00 


Shlgla 
Cash. 


1306.00 
321.00 
329.00 
329.00 
329.00 
337.00 
344.00 
344.00 
356.00 
360.00 
360.00 
383.00 
363.00 


AUCash. 


S300.00 
315.00 
323.00 
323.00 
323.00 
330.00 
338.00 
338.00 
349.00 

'353.00 
353.00 
375.00 
356.00 


Size  Separator. 


36x54 

36x56 

36x60 

37x60 

40x56 

40x60 

40x63 

40x64 

44x64 

44x66 

44  X  (8 

For  fold  ill  5  or  Plain 
Carrier 


Thne. 


$417.00 
434.00 
468.00 
472.00 
468.00 
489.00 
493.00 
497.00 
510.00 
523.00 
531.00 

25.50 


Single 
C^. 


AUCash. 


$376.00 
390.00 
421.00 
425.00 
421.00 
440.00 
444.00 
448.00 
459.00 
470.00 
478.00 

22.95 


$368.00 
383.00 
413.00 
416.00 
413.00 
431.00 
435.00 
439.00 
450.00 
461.00 
469.00 

22.10 


^ 


IR 


298 


FABH-MAOHIKBBT  TR4IIB  ASBOOIATEOITS. 


TB40TXON  wmmntB, 


eB.r.C<»lBiii]iir. 

g  M  MM 

lO  <*  MM 

U  M  MM 

H  It  MM 


1893.60 
977.  '*) 
1,062.50 
1,147.50 
1,190.00 
1,232.50 
1,276.00 


Slnclt 


1808.26 

879.75 

95'^.  25 

1,082.75 

i,on.oo 

1,100.25 
1,147.60 


idlOuh. 


8iM  EogiDe. 


1787.50 
862.50 
937.50 

1,012.50 

i,06aoo 

1,087.50 
1^25.00 


16  H.  P.  Coal  BnniAr. 

18  "  «       M 

20  M  MM 

23  «  MM 

25  M  u       m 

2D  H  MM 

30  «  MM 


81,317.50 
1,402.50 
1,487.60 
1,572.50 
1,700.00 
1,742.50 
1,912.50 


81,186.75 
1,262.25 
1,338.75 
1,415.26 
1,530.00 
1,568.25 
1,721.25 


AU 


81,162.50 
1,237.60 
1,312.60 
1,387.60 
1,500.00 
1,637.60 
1,687.60 


Each  additional  horse  power  we  estimate  at  $42.50,  time. 

To  the  foregoing  should  be  added  an  additional  cost  if  boilers  are 

jacketed. 

On  time  sales— $42.50. 

On  single  cash  sales — $38.25. 

All  ca^  sales— $37.50.  .  .  ^    .  i 

The  additional  cost  of  sfcraw-bummg  engines,  over  and  above  coal, 
would  be  the  jacket  and  straw-burning  attachments,  which  we  be- 
lieve would  be  on  time  sales,  $85.00;  single  cash  sales,  $76.50,  and  all 

cash  sales,  $75.00.  -m-         •      i. 

The  cost  of  engine  cabs  varies  according  to  sizes.    We  estimate 

$30.00  for  the  smaller  ones. 

WKI0HEB8  AND  BAGGiaEtB. 


Time. 

CMh. 

All  Cash. 

TaOmdcPer.  Weigber 

Parfieetion  Weigher.... 

Doable  Tube 

$63.75 
67.35 
57.35 

867.38 
51.65 
51.66 

166.25 

60.60 
60.00 

AIT  other  styles  of  baggers  and  weighers  in  like  proportion. 

lOBOELLAimmi. 


8elffeeder»— 

Above  83-iDdL. 

sa-lnch  and 

smaller 

HofseJPower*— 

lOH.  P 

12H.P 

14H.P 

Attached  Swing 
Stkxs 


Time 


1180.00 

143.60 

150.00 
157.50 
166.00 

137.60 


Single 

Cash 

Sales. 


PK.00 

135.00 
141.75 
148.50 

114.78 


AU  Sales 

Cashed 

Two  or 

more 

Bales 


1180.00 

123.60 

130.00 
136.50 
143.00 

112.60 


Steel 


Steel 


13      BbL 

Tanks— 

Iftd... 

Plain. 

15       Bbl. 

Tanks— 

Mtd 

Plain 

Fol<ling  Stacker.... 
Hand  Feed  Attach- 
ment  


Time 


190.00 
62.50 


97.50 
60.00 
25.50 


Single 
Cask 
Sales 


881.00 
47.25 


87.75 
54.00 
22.95 


All  Sales 

Cashed 

Two  or 

more 

Sales 


8.60 


7.66 


t78.00 
4ft.iO 


84.80 
68.00 
22.10 

7.60 


BEPATRfl. 


The  cost  of  repairs  would  be  too  difficult  for  your  committee  to 
act  upon.  We  find  that  the  usual  commission  paid  is  25  per  cent, 
and  that  on  lists  not  uniform  in  price.  In  the  opmion  of  the  com- 
mittee such  a  commission  for  selling  is  sufficient. 


299 


Exhibit  20. 


VOBM  or  LICENSE  CONTBACT  ISSUED  BY  INDIANA  MANUEACTUB- 
ING  CO.,  AXJTHOBIZING  THE  USB  OE  ITS  PATENTS,  1914. 

[Form  of  agreement  for  use  in  connection  with  grain  separators.] 

Separator 

LICENSE  AND  AGREEMENT  BETWEEN  THE  INDIANA  MANUPACTURINO 

COMPANY  AND , 

Whereas,  The  Indiana  Manufacturing  Company,  a  corporation 
duly  organized  under  the  laws  of  the  State  of  West  Virginia,  and 
having  its  principal  office  and  place  of  business  at  Indianapolis, 
Marion  County,  in  the  State  of  Indiana,  hereinafter  denominated 
the  party  of  the  first  part,  is  the  owner  of  certain  Letters  Patent  of 
the  United  States  upon  various  inventions  and  improvements  relat- 
ing to  machines  or  apparatus  for  taking  away  straw,  stalks,  dust,  etc., 
from  machines  used  m  threshing  or  separating  and  cleaning  grain, 
seeds,  etc.,  and  conveying  away  and  depositing  the  same  upon  stacks 
or  elsewhere,  such  machines  being  generally  known  as  "  Pneumatic 
Stackers  " ;  and  also  by  means  of  exclusive  license  contracts  and  other- 
wise controls  various  other  inventions  and  improvements  and  the 
Letters  Patent  thereon,  relating  to  such  machines;  which  said  Letters 
Patent  of  the  United  States,  so  owned  and  controlled  by  said  party 
of  the  first  part  include  those  numbered  and  dated  as  follows,  to- wit : 


No.  532,428,  Jan.  8, 1895 ; 
No.  634,580,  Feb.  19, 1895 ; 
No.  535,296,  March  5, 1895 ; 
No.  536, 793,  April  2, 1895 ; 
No.  536,951,  April  2, 1895 ; 
No.  537,070,  April  9, 1895 ; 
No.  537,690,  April  16, 1895 ; 
No.  537,691,  April  16, 1895 ; 
No.  540,102,  May  28, 1895 ; 
No.  540,673,  June  4, 1895 ; 
No.  541,936,  July  2, 1895 ; 
No.  645,297,  Aug.  27, 1895 ; 
No.  552,275,  Dec.  31, 1895 ; 
No.    556,776,    March    24, 

1896  * 
No.     557,020,     March  24, 

1896; 
No.  559.196,  April  28, 1896 ; 
No.  562,227,  June  16, 1896 ; 
No.  566,491,  Aug.  25, 1896 ; 
No.  566,494,  Aug.  25, 1896 ; 
No.  566, 841,  Sept.  1, 1896 ; 
No.  567,031,  Sept.  1, 1896 ; 
No.  568,315,  Sept.  22, 1896 ; 
No.  568,  883,  Oct.  6, 1896; 
No.  569,504,  Oct.  13, 1896 ; 
No.  571,898,  Nov.  24, 1896 ; 
No.  673,126,  Dec.  15, 1896 ; 
No.  676,149,  Feb.  2, 1897; 
No.  676,  740,  Feb.  9, 1897 ; 
No.  677,117,  Feb.  16, 1897 ; 
No.  680,669,  April  13, 1897 ; 
No.  681,326,  April  27, 1897 ; 


No.  584,160,  June  8, 1897 ; 
No.  588,416,  Aug.  17, 1897 ; 
No.  588,910,  Aug.  24, 1897 ; 
No.  589,125,  Aug.  31, 1897 ; 
No.  589,146,  Aug.  31, 1897 ; 
No.  592,672,  Oct.  26, 1897 ; 
No.  592,673,  Oct.  26, 1897 ; 
No.  593,995,  Nov.  23, 1897 ; 
No.  594,124,  Nov.  23, 1897 ; 
No.  594,266,  Nov.  23, 1897 ; 
No.  595,390,  Dec.  14, 1897 ; 
No.  596,307,  Dec.  28, 1897 ; 
No.  596,914,  Jan.  4, 1898 ; 
No.  598,885,  Feb.  8, 1898 ; 
No.  599,279,  Feb.  15, 1898 ; 
No.  601,356,  March  29, 

1898  * 
No.  602,063,  April  12, 1898 ; 
No.  603,040,  April  26, 1898 ; 
No.  603,593,  May  3, 1898 ; 
No.  605,925,  June  21, 1898 ; 
No.  608,223,  Aug.  2, 1898 ; 
No.  609,623,  Aug.  23, 1898 ; 
No.  611,383,  Sept.  27, 1898 ; 
No.  611,384,  Sept.  27, 1898 ; 
No.  612,213,  Oct.  11, 1898 ; 
No.  613,260,  Nov.  1, 1898 ; 
No.  614,979,  Nov.  29, 1898 ; 
No.  617,939,  Jan.  17, 1899 ; 
No.  621,428,  March  21, 

1899; 
No.  633,383,  Sept.  19, 1899 ; 
No.  633,559,  Sept.  26, 1899 ; 


No.  633,560,  Sept.  26, 1899 ; 
No.  633,561,  Sept  26, 1899 ; 
No.  635,024,  Oct.  17, 1899 ; 
No.  638,191,  Nov.  28, 1899 ; 
No.  638,560,  Dec.  5, 1899 ; 
No.  638,878,  Dec.  12, 1899 ; 
No.  639,187,  Dec.  12, 1899 ; 
No.  639,448,  Dec.  19, 1899 ; 
No.  646,708,  April  3, 1900 ; 
D.  No.  32,447,  April  3, 

1900; 
No.  648,514,  May  1, 1900 ; 
No.  649,492,  May  15, 1900 ; 
No.  649,575,  May  15, 1900 ; 
No.  652,452,  June  26, 1900 ; 
No.  660,591,  Oct.  30, 1900 ; 
No.  663,150,  Dec.  4, 1900; 
No.  668,141,  Feb.  12, 1901 ; 
No.  672,732,  April  23, 1901 ; 
No.  675,337,  May  28, 1901 ; 
No.  685,628,  Oct.  29, 1901 ; 
No.  686,144,  Nov.  5, 1901 ; 
No.  686,145,  Nov.  5, 1901 ; 
No.  686,986,  Nov.  19, 1901 ; 
No.  696,954,  April  8, 1902 ; 
No.  697,653,  April  15, 1902 ; 
No.  702,766,  June  17, 1^02 ; 
No.  703,078,  June  24, 1902 ; 
No.  705,987,  July  29, 1902 ; 
No.  706,037,  Aug.  5, 1902 ; 
R.  No.  12,022,  Aug.  19, 

1902; 
No.  712,902,  Nov.  4, 1902 ; 


300 


»ABM-MA0H1NEBY  TBADB  ASSOCIATIONS. 


ilf 


No.  718,119,  Nov.  11, 1902 ; 
No.  713,739,  Nov.  18, 1902 ; 
No.  714,525,  Nov.  25, 1902 ; 
No.  714.526,  Nov.  25, 1902 ; 
No.  715,349,  Dec.  9, 1902; 
No.  715,700,  Dec.  16, 1902 ; 
No.  717,465,  Dec.  30, 1902 ; 
No.  718395,  Jan.  13, 1903 ; 
No.  720,486,  Feb.  10, 1903 ; 
No.  721,243,  Feb.  24, 1903 ; 
No.  722,369,  March  10, 

1903* 
No.  723,204,  Marcli  17, 
1903* 

No.  725*624,  April  14, 1903 ; 

No.  727,093,  May  5, 1903 ; 

No.  728,511,  May  19, 1903 ; 

No.  729,947,  June  2, 1903 ; 

No.  736,599,  Aug.  18, 1903 ; 

No.  740,695,  Oct  6, 1903 ; 

No.  741,770,  Oct.  20, 1903 ; 

No.  747,251,  Dec.  15, 1903 ; 

No.  747,896,  Dec.  22, 1903 ; 

No.  761,627,  Feb.  9, 1904 ; 

No.  768,606,  April  26. 1904 ; 

No.  7«1,761,  June  7, 1904  *, 

No.  762,463,  June  14, 1904 ; 

No.  762,917,  June  21. 1904 ; 

No.  7«S2,918,  June  21, 1904 ; 

No.  765.403,  July  19. 1904 ; 


No.  776,456,  Nov.  29, 1904 ; 
No.  786,071,  Marcli  28, 

1905' 
No.  811,532,  Jan.  30, 1906 ; 
No.  811,786,  Feb.  6, 1906; 
No.  821,584,  May  22, 1906 ; 
No.  823,418,  June  12, 1906 : 
No.  830,337,  Sept.  4, 1906 ; 
No.  830,618,  Sept.  11, 1906 ; 
No.  832,283,  Oct.  2, 1906; 
No.  840,603.  Jan.  8, 1907 ; 
No.  845,876,  March  5, 

1907  * 
B.  No!  12,655,  May  21, 

1907* 
No.  856*609,  June  11, 1907 ; 
No.  866,240,  Sept.  17, 1907 ; 
No.  872,868,  Dec.  3, 1907 ; 
No.  873,829,  Dec.  17, 1907 ; 
No.  877,320,  Jan.  21, 1908 ; 
No.  888.571,  May  26, 1908 ; 
No.  902,841,  Nov.  3, 1908 ; 
No.  902,842,  Nov.  3, 1908; 
No.  903,743,  Nov.  10, 1908 ; 
No.  921,341,  May  11, 1909 ; 
B.  No.  13,039,  Nov.  16, 

1909  * 
No.  950*120,  Feb.  22, 1910 ; 
No.  958,137,  May  17, 1910 ; 
No.  958,213,  May  17, 1910 ; 


No.  962,068,  June  21, 1910;  , 
No.  965,310,  July  26. 1910 ; 
No.  966,719,  Aug.  9, 1910; 
No.  970.183,  Sept.  13, 1910 ; 
No.  970,956,  Sept.  20, 1910 ; 
No.  9n,329,  Sept.  27, 1910; 
No.  971,933,  Oct.  4, 1910; 
No.  972,437,  Oct.  11, 1910 ; 
No.  973,113,  Oct.  18, 1910 ; 
No.  973,748,  Oct.  25. 1910; 
No.  974,483,  Nov.  2, 1910; 
No.  984.549,  Feb.  21, 1911 ; 
No.  989,296,  April  11, 1911 ; 
No.  997,307,  July  11, 1911; 
No.  997,936,  July  11, 1911 ; 
No.  1,000,032,  Aug.  8, 1911 ; 
No.  975,230,  Nov.  8, 1910 ; 
No.  1,014,778,  Jan.  16, 

1912; 
No.  1,014,779,  Jan.  16, 

1912; 
No.  1.019.194,  Mch.  5, 1912 ; 
No.  1,028.793,  June  4, 

1912;  _ 

No.  1,051,655,  Jan.  28, 

1913  * 
No.  1,059,658,  Apr.  22, 

1913; 
Other  patents  pending. 


and  has  the  exclusive  right  to  issue  licenses,  or  sub-licenses,  or  other 
contracts  or  agreements,  authorizing  the  manufacture,  sale  or  use  of 
anv  or  all  the  inventions  aforesaid.  .       ,  ,  •     j       j 

ind  whereas, ,  a  corporation  duly  organized  und^^^^ 

the  laws  of  the  State  of ,  and  having  its  principal  office  and 

place  of  business  at , County,  m  the  State  of  ——, 

Lremafter  denominated  the  party  of  the  second  part,  ^^,  ^^^^^omof 
acQuirinff  a  right  to  manufacture,  sell  and  use  "  Pneumatic  Stackers 
or  machmes  embodying  any  or  all  the  said  inventions  or  improve- 

""n^,  therefore,  this  mdenture  witnesseth,  that  for  and  in  con- 
sideration of  the  s\mi  of  One  Dollar  ($1.00)  m  hand  paid,  the  receipt 
whereof  is  hereby  acknowledged,  and  of  the  various  undertakmg. 
hereinafter  expressed,  the  said  party  of  the  first  part  has  licensed  and 
empowered,  and  does  hereby  license  and  empower,  the  sp^  P^jty  «t 
the  second  part,  to  manufacture,  sell  and  use  "  Pneumatic  Stackers 
embodying  any  of  the  inventions  of  any  of  the  aforesaid  Letters 
Paten/ownediy  the  said  party  of  the  first  part  or  any  reissues  or 
extensions  thereof  until  the  full  end  of  the  terms  of  any  and  all  said 
Otters  Patent,  or  controlled  by  said  party  of  the  first  part  by  means 
of  any  license  or  agreement  so  long  as  the  licens^  or  agreements  re- 
latmg  thereto  are  in  force,  to  be  used  throughout  the  United  States 
and  the  Territories  thereof,  said  manufacture,  sale  and  use  to  be  upon 
the  terms  and  conditions  following,  to-wit:  i,«^^u„ 

1  The  said  party  of  the  second  part  has  agreed  and  does  hereby 
aer^  to  and  with  the  said  party  of  the  first  part,  to  pay  to  the  said 
pirty  of  the  first  part  a  license  fee  or  royalty  of  thirty  dollars 
( S30  00>  upon  each  and  every  machine,  or  attachment  to  a  machine, 
embodying  any  of  the  above-mentioned  inventions  or  improvements. 


EXHIBITS. 


301 


which  may  be  made,  sold  or  used  by  or  for  the  said  party  of  the 
second  part,  which  said  royalty  shall  become  due  and  payable  at  the 
times  of  settlement  hereinafter  named;  and  said  party  of  the  first 
part  agrees  to  make  a  discount  of  Three  Dollars  ($3.00)  per  stacker 
upon  the  royalty  of  Thirty  Dollars  ($30.00)  to  be  paid  by  said  party 
or  the  second  part  under  said  license,  if  and  when  said  party  of  the 
second  part  shall  promptly  pay  its  royalties  coming  due  under  this 
license  m  cash  upon  the  first  day  of  January  of  each  year,  or  within 
fifteen  (15)  days  after  demand  therefor,  during  the  continuance  of 
this  license. 

2.  The  said  party  of  the  second  part  further  agrees  to  keep  full, 
just,  true  and  proper  books  and  accounts  concerning  the  manufacture 
and  sale  aforesaid,  which  shall  be  open  to  examination  by  the  said 
party  of  the  first  part,  or  its  duly  constituted  agents  or  representa- 
tives, during  usual  business  hours,  at  all  proper  and  reasonable  times, 
and  will  render  to  the  said  party  of  the  first  part  full  and  complete 
written  reports  on  the  last  days  of  Jime  and  December  of  each  year, 
under  oath  if  required,  showing  a  full  account  of  all  said  "  Pneumatic 
Stackers  "  which  have  been  made  or  sold  under  this  license  and  agree- 
ment ;  at  which  said  times  said  party  of  the  second  part  also  agrees 
to  account  for  and  pay  over  to  the  said  party  of  the  first  part  all 
amounts  which  have  accrued  as  royalties  hereimder :  Provided^  how- 
ever, that  the  June  settlements  may  be  made  by  note  at  six  months 
without  interest :  And  provided,  further,  that  all  "  Pneumatic 
Stackers"  which  the  said  party  of  the  second  part  shall  have  re- 
maining on  hand  and  unsold  on  the  last  day  of  December  of  each  year 
shall  be  deducted  from  the  account,  and  carried  over  to  be  accounted 
for  in  the  next  succeeding  settlement. 

3.  It  is  further  agreed  that  each  report  rendered  to  the  party  of  the 
first  part  by  the  party  of  the  second  part  shall  particularly  state 
how  many  of  each  of  the  various  distinctive  kinds  of  "Pneumatic 
Stackers  "  hereby  licensed  to  be  made,  have  been  made  by  or  for  the 
said  party  of  the  second  part  during  the  period  covered  by  said 
report,  so  that  the  party  of  the  first  part  may  have  a  basis  for  ad- 
justment with  the  owners  of  such  patents  as  it  may  hold  or  control 
by  means  of  licenses. 

4.  And  whereas,  the  said  party  of  the  first  part,  for  the  purpose 
of  preserving  its  legal  rights,  and  of  securing  publicity  of  the  fact 
that  machines  of  this  character  are  made  under  its  authority,  has 
designed  labels  of  a  peculiar  sort  (known  as  "transfers"),  and  as 
one  of  the  conditions  of  granting  license  requires  a  set  of  three 
thereof,  composed  of  one  label  bearing  a  list  of  patent  dates  and  two 
medallions  embodying  the  trade-mark  of  the  said  party  of  the  first 
part,  to  be  affixed  to  each  and  every  "Pneumatic  Stacker"  made 
under  its  license  or  authority ;  the  list  of  patents  in  any  convenient 
place,  and  the  two  medallions  or  trade-marks  on  opposite  sides  of 
the  machine  where  they  are  conspicuously  observable.  Now,  there- 
fore, the  said  party  of  the  second  part  further  agrees  to  and  with 
the  said  party  of  the  first  part  that  it  will  procure  (free  of  charge) 
from  said  party  of  the  first  part  labels  as  above  described,  and  attach 
or  cause  to  be  attached  a  set  (3)  of  the  same  (in  the  manner  herein- 
before stated)  to  each  and  every  machine  made  and  sold  by  or  for 
the  said  party  of  the  second  part  embodying  any  of  the  inventions 
of  any  of  the  aforesaid  Letters  Patent;  fauing  in  which  the  said 


'I 


It 


302 


VikBM-MAGHnnBBY  TRADE  ASBOOIAlIOirS. 


party  of  tlie  second  part  shall  pay  to  the  said  party  of  the  first  part 
the  sum  of  one  hundred  dollars  ($100.00),  as  liquidated  damages, 
now  estimated,  determined  and  agreed  upon,  and  without  relief,  for 
and  on  account  of  each  and  every  machine  sold  by  or  for  said  party 
of  the  second  part  without  bein^  so  marked  or  labeled  with  all  the 
said  transfers  or  labels  herein  and  hereby  required. 

5.  And  the  said  party- of  the  second  part  agrees  to  and  with  the 
said  party  of  the  first  part  that  the  selhng  price  to  users  of  "  Pneu- 
matic Stackers"  embodying  or  including  the  inventions  aforesaid, 
or  either  or  any  of  them,  shall  be  two  hundred  and  fifty  dollars 
($250.00)  on  time,  (but  to  be  fully  paid  for  within  two  years  from 
date  of  sale),  or  two  hundred  and  thirty-five  dollars  ($235.00)  in 
ca^ ;  and  the  said  party  of  the  second  part  expressly  agrees  to  and 
with  the  said  party  of  the  first  part  not  to  sell  any  such  machine  or 
machines  to  any  person  or  party,  other  than  an  agent  or  dealer  who 
buys  the  same  to  be  sold  ^S^^  who  may  have  a  discount  of  not  to 
exceed  twenty-five  dollars  ($25.00), or  an  established  jobber  of  thresh- 
ing machinery  who  regularly  buys  at  wholesale  and  retails  through 
sub-agents,  and  who  is  regularly  licensed  as  such  by  the  said  party 
of  the  first  part  under  the  aforementioned  patents,  who  may  have  a 
discoimt  of  not  to  exceed  seventy-five  dollars  ($75.00),  at  any  less 
price  or  on  any  better  terms  than  herein  specified  and  agreed  upon. 
And  it  is  further  expressly  agreed  that  should  there  be  any  violation 
or  evasion  of  this  agreement,  directly  or  indirectly,  on  the  part  of 
the  said  party  of  the  second  part,  said  party  of  the  second  part  shall 

Say  to  tne  said  party  of  the  first  part  the  sum  of  one  hundred 
ollars  ($100.00)  as  liquidated  damages,  now  estimated,  determined 
and  agreed  upon,  for  each  and  every  such  violation  or  evasion  hereof. 
This  agreement  is  made  for  the  purpose  of  effectually  protecting  the 
rights  secured  by  the  Letters  Patent  hereinbefore  mentioned,  which 
form  the  basis  of  this  agreement,  and  the  price  so  established  em- 
bodies the  license  fee  which  it  has  been  determined  is  fair  and  just 
to  users  of  said  patented  inventions  or  improvements. 

6.  The  said  party  of  tiie  second  part  further  agrees  to  and  with 
the  said  party  of  the  first  part  to  take  all  orders  for  "Pneumatic 
Stackers"  upon  separate  order  blanks  of  a  form  approved  by  the 
said  party  of  the  first  part,  or  as  separate  and  distinct  items  of  the 
orders  when  ordered  in  connection  with  other  machinery. 

7.  The  said  party  of  the  second  part,  for  and  as  a  part  of  the 
consideration  for  tlie  granting  of  this  license,  has  expressly  agreed, 
and  does  hereby  agree,  to  ana  with  the  said  party  of  the  first  part, 
not  to  dispute,  directiy  or  indirectly,  the  Letters  Patent  upon  which 
this  contract  is  founded,  or  any  reissues  thereof,  nor  make  their 
alleged' invalidity  a  defense  in  any  proceeding  under  this  contract, 
or  a  jCToimd  of  refusing  to  make  any  payments  called  for  hereby. 

8.  The  said  party  oi  the  second  part  further  expressly  agrees  to 
and  with  the  said  wrtj  of  the  first  part,  to  mark  each  and  every 
machine  made  by  the  said  party  of  the  second  part  with  the  marks 
required  by  the  present  patent  laws  of  the  United  States,  or  any  law 
hereafter  enacted  concerning  the  marking  of  patented  articles,  to 
preeerve  any  of  the  rishts  of  the  patentee  or  patent  owner. 

9.  Tlie  said  party  oithe  first  part,  in  consideration  of  the  promises 
and  agreemente  herein  containea,  to  it  made  by  the  said  par^  of  the 


• 


EXHIBITS. 


303 


second  part,  promises  and  agrees  to  prosecute  all  substantial  infringe- 
ments of  its  rights,  and  of  the  rights  of  the  parties  hereto  granted  by 
the  United  States  Letters  Patent  upon  which  these  articles  are  based ; 

fand  also  to  give  to  the  said  party  of  the  second  part  the  right  to  use 
all  improvements  made  or  acquired  hereafter  by  said  party  of  the 
first  part  upon  or  pertaining  to  "  Pneumatic  Stackers,"  without  any 
additional  royalty  fee.  It  is,  however,  expressly  understood  and 
agreed  that  all  patents  and  inventions  relating  to  "Pneumatic  Stack- 
ers," the  title  or  control  of  which  may  hereafter  be  obtained  or 
acquired  by  the  said  party  of  the  first  part,  if  used  by  the  said  party 
^  of  the  second  part,  shall  be  used  under  and  subject  to  all  the  terms 
and  conditions  of  this  license  and  agreement,  which  it  is  hereby  ex- 
pressly agreed  shall  apply  to  any  and  all  such  newly  obtained  or  ac- 
quired patents  and  inventions. 

-  10.  The  said  party  of  the  first  part  further  agrees  to  and  with  the 
said  party  of  the  second  part  that  if  it  shall  hereafter  grant  any  more 
favorable  terms  in  any  license  to  build  "  Pneumatic  Stackers  "  to  be 
^  used  in  connection  with  machines  for  threshing  grain  than  the  terms 
"  granted  in  these  articles,  either  in  amount  of  royalty  or  otherwise, 
to  any  person  or  corporation,  that  the  same  concessions  shall  upon 
like  terms  and  conditions  be  made  to  the  said  party  of  the  second 
part,  and  shall  become  a  part  of  these  articles. 

11.  This  license  and  agreement  may  be  terminated  at  the  option  of 
the  party  of  the  second  part  at  the  expiration  of  the  El  ward  Patent 
(Re-issued  Letters  Patent  numbered  12,022,  expiring  December  10, 
1918),  hereinabove  mentioned,  or  at  the  option  of  the  party  of  the 
second  part  may  then  be  continued  until  the  full  end  of  the  terms 
of  each  and  all  of  the  Letters  Patent  of  the  United  States  pertaining 
to  "  Pneumatic  Stackers  "  herein  recited  owned  by  said  party  of  the 
first  part,  or  any  reissues  thereof,  or  for  such  less  period  as  said  party 
of  the  second  part  may  elect,  upon  the  terms  and  conditions  in  this 
agreement  set  forth,  or  upon  such  other  terms  and  conditions  as  the 
parties  hereto  may  then  mutually  agree  upon. 

The  rights,  duties,  privileges  and  obligations  arising  under  or 

p-owing  out  of  this  license  and  agreement  shall  extend  to  and  be 

binding  upon  the  successors,  assigns  and  legal  representatives  of  the 

parties  hereto  respectively. 

Executed  in  duplicate. 

In  Testimony  Whereof,  said  The  Indiana  Manufacturing  Com- 

Sany  has  caused  these  presents  to  be  executed  at  Indianapolis,  In- 
iana,  this day  of 191 — . 


Attest: 


The  Indiana  Manufacturing  Company, 
By y  President. 


In  Testimony  Whereof,  said 
ents  to  be  executed  at ,  - 


-,  this 


-,  has  caused  these  pres- 
—  day  of 191—. 


Attest: 


By 


I  ■■ 


m\ 


II! 


Ill 


804  farm-machineby  trade  assooiatiohb. 

Exhibit  21. 

VOBM  or  PATENTS  PTTBCHASB  AGBEEMENT  BETWEEN   THE  IH- 
BIANA  MANXIEACTUBINO  CO.  AND  LICENSEES. 

PATENTS  PUHCHA8E  AGREEMENT. 

Memorandum  of  an  Agreement  made  between  The  Indiana  ^n- 
UPACTURING  Company,  a  corporation  of  West  Virginia,  having  oflftces 
at  Charleston,  West  Virginia,  and  at  Indianapolis,  Indiana,  herein- 
after called  the  licensor,  and ,  hereinafter  called  the 

licensee,  Witnesseth :  ,         * .         x* 

Whereas,  the  licensor  is  sole  owner  of  a  large  number  of  inventions 
and  Letters  Patent  on  "  Pneumatic  Stackers,"  respecting  which  the 
licensee  has  heretofore  secured  the  right  to  make,  use  and  sell  all 
of  said  inventions  or  improvements,  by  written  license  from  the 
licensor,  now  in  full  force;  and,  j  j      i 

Whereas,  the  licensor  aims  to  encourage  the  invention  and  develop- 
ment of  various  improvements  in  "Pneumatic  Stackers,"  and  de- 
sires to  purchase  improvements  or  inventions  and  Letters  Patent 
relating  to  "  Pneumatic  Stackers,"  and,  under  its  exclusive  control, 
seeks  to  vest  the  benefit  thereof  amongst  its  several  licensees ;  and. 

Whereas,  the  licensee  desires  to  acquire  for  use  m  its  business,  the 
right  to  adopt  and  employ  any  one  or  more  of  the  improvements 
aforesaid,  held  within  control  of  the  licensor  only; 

Now,  therefore,  the  parties  hereto  have  severally  agreed  as  follows, 

that  is  to  say:  ,.  ^  ^       x  x     j-        xi. 

I.  During  the  term  of  the  license  at  present  outstanding,  the 
licensee  undertakes  to  faithfully  keep  and  perform  each  and  every 
of  the  following  named  conditions,  viz. : 

a.  To  use  reasonable  efforts  in  the  endeavor  to  improve  upon 
Pneumatic  Stackers,  and,  as  often  as  may  be,  to  promptly  disclose 
unto  the  licensor  full  knowledge  of  the  several  improvements  m 
Pneumatic  Stackers  from  time  to  time  coriiing  within  its  notice  and 

control.  .  ,         .,  .^  _x       'J 

b.  At  expense  of  the  licensor,  and  as  often  as  it  may  request,  said 
licensee  is  required  to  execute  or  cause  to  be  executed  the  usual  appli- 
cation papers  and  assi^ments  deemed  necessary  to  vest  in  said 
licensor  the  rights  or  privileges  pertaining  to  such  improvements  in 
Pneumatic  Stackers,  thus  including  the  Letters  Patent  of  the  United 
States  and  of  the  Dominion  of  Canada,  or  other  foreign  countries, 
now  or  hereafter  issued  and  owned  or  controlled  by  the  licensee,  or 
in  which  it  has  or  may  later  acquire  an  interest. 

IL  So  long  as  the  licensee  faithfully  keeps  and  performs  the 
conditions  aforesaid,  and  each  of  them,  respectively,  the  licensor  on 

its  part  agrees:  ,      .  .,  -       , . 

c.  To  grant  unto  said  licensee  the  right  and  privilege  of  making, 
using  and  vending,  without  extra  charge,  all  and  singular,  the 
improvements  acquired  hereunder,  or  by  other  agreement  of  similar 
sort,  made  from  time  to  time,  with  any  other  party  or  parties,  and  to 
give  the  licensee  prompt  notice  of  such  acquirements. 

d.  To  pay  unto  said  licensee  the  sum  of  Five  Dollars  ($5.00)  on 
each  and  every  wind  stacker  made  and  sold  for  attachment  to  thresh- 
ing machines  and  settled  for  at  the  royalty  rate  by  said  licensee, 
including  aJl  made  and  sold  during  1908,  ana  thereafter. 


BXHIBITS. 


805 


^ 


in.  Upon  failure  or  refusal  of  the  licensee  to  faithfully  keep  and 
perform  the  several  conditions  named  in  Article  I  hereof,  or  any  of 
them,  or  material  parts  thereof,  it  is  mutually  agreed  that  this  con- 
tract may  be  annulled  at  the  option  of  the  licensor,  duly  exercised 
on  written  notice  given  within  thirty  days  next  after  expiry  of  a 
preliminary  period  of  thirty  days,  allowed  the  licensee  for  proper 
correction  of  the  delinquencies,  called  to  its  attention  by  written  de- 
mand ;  and  no  other  or  further  penalty,  or  liability,  shall  be  incurred 
by  the  licensee,  through  its  failure  or  refusal  to  perform  the  several 
conditions  named  in  Article  I,  except  the  cancellation  of  this  con- 
tract, to  take  effect  only  in  the  future;  and  the  payment  made  or  lia- 
bility incurred  by  licensor  under  Clause  d.  Article  II,  prior  to  its 
cancellation  shall  not  be  withheld  or  recovered  back  by  the  licensor 
from  the  licensee. 

"  Said  licensee  may  also  at  its  own  option  at  any  time  cancel  this 
contract  by  giving  the  licensor  at  least  thirty  (30)  days  written 
notice  thereof  and  thereupon  all  rights  and  obligations  of  either 
party  to  the  other  under  this  agreement  shall  from  said  date  cease 
and  determine,  and  this  contract  be  deemed  to  be  canceled. 

In  testimony  whereof,  said  The  Indiana  Manufacturing  Company 
has  caused  these  presents  to  be  executed  at  Indianapolis,  Indiana, 
this day  of ,  A.  D.  1909. 

The  Indiana  Manufacturing  Company, 

By ,  President. 


Attest: 


In  testimony  whereof,  said 
to  be  executed  at this 


Attest : 


day  of 


-,  has  caused  these  presents 
,  A.  D.  1909. 


By 


Exhibit  22. 

FOBM  OP  EOTALTY  BEPOBT   REQUIRED   OF  LICENSEES  OF   THE 
INDIANA  MANUFACTURING  COMPANY. 


Form  60-10-1-12. 


ROYALTY  REPORT    (SEPARATOR). 


191- 


The  Indiana  Manufacturing  Company, 

Indianapolis,  Ind. 
Gentlemen  :--The  following  is  a  full  and  complete  report  cover- 
ing all  transactions  relating  to  the  manufacture  and  sale  of  pneu- 
matic STACKERS  by  the  undersigned  during  the  year  191 — ,  authorized 
by  License  Contract  with  your  Company,  together  with  a  statement 
01  all  "  Transfers  "  handled  during  the  same  period. 

(Sign  here) , 

Per  ^-^-^ ^ 

68248'— 16 70 


|i^ 


806 


VABM-MAOHnnSRY  TSLUm  ASSOOUllONa 


EXHIBITS. 


807 


tit 


style  of  staokefB. 

DMi!i'l|41'Vik 

Gear- 

Oraod 
total. 

TMa]  rnimlHir  hnmfftit  fluff  wild  from  ifll-— ..ttt-t-t-^-- 

Tnte^  miTP^^'i'  vnftiiiilb^Hir«4  in  VMT  101— ..-••■•■••-• - 

* 

Total  to  iMaooouiitod  for .... 

T>«Mliipt  niimf)#r  (in  hsiid.  unflokl •••.••«t 

3 

•I             ••                                     ,,,. 

•            m                                    

Total  to  be  deducted 

Total  mnaber  totMMtOid  ^m,  Jmmj  1,191—.. 

Tnlmt  finmlMy  rMTJud  ftgwMil  to  Iffl*^  .•••••.*••■•••«» 

e» 


SHOP  lfT7MBEBS  OF  8TACKEB8  OABBIED  lOBWABD  TO   Itl- 


HBAn  O*  ABB* 


Kind  of  transfen. 

Desci  iptif  n 

Medal- 
Uam. 

Patent 
dates. 

Grand 
totaL 

TmIaI  nnmbflr  reeohred  in  tlM  vear  m— ............... 

Total  to  be  sfTounted  for. ...................... 

Bedod  number  used  on  new  Etacken  in  101— 

«           «                                                  

•           •                                                  

m           m                                                     

Total  to  be  deducted 

1 

BOTALTT    REPORT,    THE    INDIANA    MANUPACTTJRINa    OOMPANT,    INDIAN- 
APOLIS. 


SHEirr  NO. 


BT 


-,  1»1— . 


stacker  number. 

Cos- 
tomer. 

Post 
ofBce. 

Stato. 

Style 

of 

stacker. 

Make 

of 

Num- 
ber of 
separa- 

8iE«. 

Cyl. 

Rear. 

1 

2 

e 

3 

4 

5 

61 

1       1       1 

1  Original  form  proviles  for  40  numbered  entres. 

Exhibit  23. 
COmbtxtutiON  and  BY-LAWS  OP  THE  NATIONAL  FEDERATION  OT 

implement  and  vehicle  dealebs'  associations. 

Constitution, 
article  l — ^namb. 

This  corporation  shall  be  known  as  the  National  Federation  of 
Retail^  Implement  and  Vehicle  Dealers'  Associations,  and  under 
such  name  mall  its  business  be  conducted  and  transacted. 

ARnCLB  n. — LOCATION. 

Its  domicile  shall  be  Kansas  Citv,  state  of  Missouri,  but  its  corre- 
spondence may  be  conducted,  bulfetins  issued,  and  other  necessary 
business  transacted  at  the  office  of  the  Federation  secretary,  wherever 
that  may  be. 

ARnCLB  m. — OBJECT. 

The  object  for  which  this  Federation  is  formed  is  to  supply  its 
constituent  associations  and  their  members  with  any  and  all  legal 
and  proper  information  which  may  legitimately  come  into  its  pos- 
session, and  which  may  be  of  interest  or  value  to  the  same. 

ABnCLB  IV. — ^MEMBERSHIP. 

The  members  of  this  Federation  shall  consist  of  the  several  con- 
stituent associations,  by  their  accredited  representatives,  as  provided 
for  in  Section  5  of  the  By-laws  hereto  attached. 


Pom  01,  io-is>i8» 


*  At  the  ananal  meeting  in  October,  1914.  the  word  "  Retail "  was  eliminated. 


i 


IpfH 


I 


808 


7ABM-MACHINE&T  TEMM  ASSOCIATIOKa 


ABTlCIiB  v.— OFFICaBM. 


309 


The  affairs  of  this  Federation  shall  be  man^d  by  an  Official 
Board  consisting  of  a  President,  Vice-president,  Secretary-treasurer, 
and  six  Directors.  The  Secretary-treasurer  shall  be  elected  at  the 
first  meeting  of  tiie  Official  Board  for  a  period  of  one  year.  The 
others  shall  be  elected  by  the  annual  meeting,  the  President  and  Vice- 
president  for  one  year,  the  directors  first  time,  two  for  one  year,  two 
for  two  years,  and  two  for  three  years,  thereafter  two  annually  for 
a  term  of  three  years;  provided,  however,  that  any  officer  or  Director 
shall  serve  until  his  ipiccessor  shall  be  elected  and  qualified. 

▲BTICLE  VI. — DUTIB8. 

The  duties  of  the  several  officers  shall  be  such  as  usually  devolve 
upon  like  officers  in  similar  positions,  and  the  Secretary-treasurer 
shall  perform  such  special  duties  as  are  assigned  him  by  the  Official 
Boara.  Should  a  vacancy  occur  the  Official  Board  shall  have  au- 
thority to  elect  someone  to  fill  the  same,  who  shall  serve  until  the 
neadi  regular  or  special  meeting  of  the  Federation. 

ARTIGLB  Vn. — MMBrrSQS. 

» 

The  Federation  shall  hold  an  annual  meeting  at  such  time  and 

Slace  as  the  Official  Board  or  Executive  Committee  may  each  vear 
etermine.  Special  meetings  shall  be  called  by  the  President  when- 
ever a  majority  of  the  Official  Board  may  request  the  same.  The 
Cifficial  Board  shall  meet  as  soon  as  practicable  after  the  close  of  the 
annual  meeting.  Other  meetings  shall  be  called  by  the  President  on 
request  of  a  majority  of  the  Board  or  of  the  Executive  Committee. 
A  quorum  for  the  annual  meeting  shall  be  ten,  of  the  Official  Board 
five,  and  of  the  Executive  Committee  two. 

AimCLE  Vm. — ^AMENDMENTS. 

The  by-laws  or  oonsfcitution  may  be  amended  from  time  to  time  by 
a  majority  vote  of  the  delegates  present  at  any  annual  meeting,  «r 
at  any  special  meeting  if  ten  days'  written  notice  of  the  pro^)sed 
change  shall  have  been  given.  Or,  in  case  of  emergency,  the  Official 
Board  shall  have  authority  to  ainen<L  and  such  amendments  shall 
iHaid  until  the  next  annual  meeting  of  the  Federation. 

•  ABTIGLE  H. — EXECUTIVE  OOMMITTEB.  « 

The  President,  Vice-President  and  Secretary-treasurer  shall  ex- 
officio  constitute  an  Executive  Committee,  which  shall  act  during 
the  interim  between  meetings  of  the  Official  Board,  and  during  such 
time  said  committee  shall  have  and  exercise  the  full  power  and  au- 
thority of  the  said  Board,  and  its  acts  shall  stand  and  be  in  effect 
until  the  next  meeting  of  the  Offidal  Board  or  of  the  Federation. 
The  Executive  Committee  shall  meet  on  call  of  the  President,  or  of 
the  Seawtary,  when  in  the  judgment  of  either  the  interests  of  the 
Federation  require. 


O 


By-laws. 


SECTION  1. 


It  shall  be  the  duty  of  the  Secretary,  on  order  of  the  Official  Board, 
to  receive  and  file  for  the  information  of  the  constituent  associations 
and  their  members  all  such  legal  and  proper  information  as  shall 
be  transmitted  to  this  Federation  by  and  through  its  members,  but 
no  such  information  or  bulletins  shall  be  disseminated  imtil  the  same 
shall  have  been  considered  and  approved  by  the  Official  Board  or  the 
Executive  Committee,  either  in  session  or  by  correspondence,^ 

SEcrnoN  2. 

It  shall  be  the  duty  of  the  Secretary  quarterly,  or  as  often  as  the 
Official  Board  may  deem  advisable,  to  issue  a  bulletin  to  the  con- 
stituent associations  and  their  members. 

SEC5TI0N  8. 

When  and  so  often  as  such  bulletins  shall  be  ordered  by  the  Official 
Board  of  this  Federation  it  shall  be  the  duty  of  the  Secretary  to 
publish  and  disseminate  the  same. 

SECTION  4. 

It  shall  be  the  duty  of  each  constituent  associaticm,  through  its 
secretary,  to  supply  a  corrected  list  of  the  members  in  good  standing 
of  said  association,  to  the  Secretary  of  the  Federation,  whenever  and 
so  often  as  tiie  same  shall  be  corrected  and  published. 

SECTION  &. 

Any  retail  Implement  and  Vehicle  Dealers'  Association  which 
shall  have  accepted  the  constitution,  by-laws  and  rules  of  this  Feder- 
ation, and  shall  have  provided  for  the  payment  of  the  sum  of  forty 
cents  (40^)  per  annum  for  each  member  in  good  standing  in  said 
association  on  the  first  day  of  October  next  preceding  (payable  as 
soon  as  possible  after  the  annual  meetings  of  the  several  associations) 
toward  the  expenses  of  this  Federation,  shall  by  virtue  of  the  same, 
become  a  member  or  constituent  association  of  this  Federation,  and 
shall  be  entitled  to  representation  in  annual  and  special  meetings  of 
the  Federation  on  the  basis  of  one  delegate  for  each  one  hundred 
members,  or  fraction  thereof  exceeding  fifty,  on  which  said  associa- 
tion pays  per  capita  tax.  And  all  members  in  good  standing  of  said 
constituent  association,  shall  by  virtue  of  the  payment  as  above  de- 
scribed, be  entitled  to  all  bulletins,  correction  sheets,  or  other  infor- 
mation published  by  said  Federation,  which  shall  be  designed  for  the 
information  of  members,  and  to  call  upon  the  officers  of  said  Feder- 
ation at  all  times  for  any  special  information  which  it  may  be  in 
their  power  to  give;  provided,  however,  that  if  the  legitimate  ex- 
penses of  the  Federation  for  any  year  be  f oimd  to  exceed  the  amount 

^ItaUcized  words  in  ink  in  copy. 


810 


FABM-MAOHDmr  —*"■  ASSOOUHOKB. 


EXHIBITS. 


811 


>i| 


m 


b 


f 


realized  from  the  per  capita  tax  of  forty  cents  (4(V)  per  member, 
then  the  deficit  shall  be  paid  by  the  several  constituent  associations 
pro  rata  in  proportion  to  the  number  of  members  in  good  standing 
on  the  first  of  October  next  preceding,  as  aforesaid,  except  that  in 
no  case  shall  any  association  be  asked  to  pay  over  twenty  cents  (2(V) 
per  member  in  a^ddition  to  the  per  capita  tai  of  forty  cents  (40^)  prcH 
¥ided  for  in  this  section. 

SECTION  e. 

No  officer  of  this  Federation  shall  receive  any  salary  except  the 
Secretary,  who  shall  be  paid  such  salary  as  may  oe  fixed  by  the  Offi- 
cial Board.  But  each  member  of  the  Official  Board  shall  be  entitled 
to  have  his  necessary  expenses  paid  when  attending  meetings  or 
acting  under  the  instruction  of  the  Board,  provided,  however,  that 
no  member  or  members  of  the  Official  Board  from  any  one  association 
shall  be  allowed  a  greater  amount  for  expenses  than  will  equal  the 
amount  paid  by  sam  association  toward  the  expenses  of  the  Feder- 
ation. Any  additional  expenses  over  that  amount,  as  well  as  expenses 
of  delegates  who  are  not  members  of  the  Official  Board,  must  be 
borne  by  the  individual  or  his  own  association. 

BBCnON  T. 

The  Official  Board  shall  take  such  action  as  may  be  deemed  neces- 
sary or  advisable  in  regard  to  inspecting  and  auditing  the  books  and 
accounts  of  the  Secretary-treasurer,  and  safeguardi]^  the  funds  of 
the  Federation.  

ExHinrr  24. 

CONSTITUTION  AND  BT-LAWS  BECOMMENDED  IN  1004'  BY  THE 
NATIONAL  FEDBBATION  07  IMPLEMENT  AND  VEHICLE  ASSO- 
GZATIONS  FOB  AIXIFTION  BY  CONSTITirBNT  ASSOCIATIONS. 

CONSTTTUnON. 
DECUIBATION  OF  PURPOSE. 

We  realize  the  convenience,  if  not  necessity,  of  the  retail  imple- 
ment, vehicle  and  hardware  dealer  to  every  community,  and  we  are 
interested  in  the  promotion  of  the  general  welfare  and  the  perpetua- 
tion of  the  retail  implement,  vehicle  and  hardware  business. 

We  recognize  the  absolute  right  of  every  person,  partnership  or 
corporation  to  establish  and  maintain  as  many  retail  stores  as  he, 
thevj  or  it  may  see  fit.' 

We  recognize  the  legal  right  of  the  manufacturer  and  wholesale 
dealer  in  implements,  vehicles  or  hardware  to  sell  implements,  vehi- 
cles or  hardware'  in  whatever,  market,  to  whatever  purchaser,  and 
at  whatever  price  they  may  see  fit 

'  ^  CliftiiKes  subsequently  recommended  bj  tbe  Federation  are  Indicated  In  tbe  footnotes  to 
this  ezlilbit. 

*At  tbe  meeting  of  tbe  National  Federation  In  October,  1910,  It  recommended,  by 
unanimous  rote,  tbat  tbls  paragraph  be  omitted  and  that  each  constituent  association 
take  prompt  action  in  executive  session  on  tbe  matter.     (See  pp.  160,  161.) 

•  In  tbe  cony  of  tbe  constitution  furnished  tbe  Bureau  of  Corporations  a  line  has  been 
dfawn  through  the  words  "  implements,  Tehleies  or  hardware." 


We  also  recognize  the  disastrous  consequences  which  result  to  the 
regular  retail  implement,  vehicle  and  hardware  dealer  from  direct 
competition  with  wholesalers  and  manufacturers,  and  appreciate  the 
importance  to  the  retail  dealer  of  accurate  information  as  to  the 
nature  and  extent  of  such  competition  where  any  exists. 

And,  recognizing  and  appreciating  the  advantage  of  co-operation 
in  securing  and  disseminating  any  and  all  proper  information  for 
our  mutual  convenience,  benefit  or  protection,  we  have  organized  this 
association,  and  have  adopted  the  following  articles  for  the  govern- 
ment of  our  affairs. 

▲BnCLES  OF  ASSOCIATION. 


Abtice  I. — Name. 
The  name  of  this  organization  shall  be  - 


Abtiole  IL — The  Ohiect 

The  object  of  this  association  is  and  shall  be  to  secure  and  dissemi- 
nate to  its  members  any  and  all  legal  and  proper  information  which 
may  be  of  interest  or  value  to  any  member  or  members  thereof  in  his 
or  their  business  as  retail  implement,  vehicle  or  hardware  dealers. 

Abtiole  III. — Limitations  and  Restrictions, 

Section  1.  No  rules,  regulations  or  by-laws  shall  be  adopted  in  any 
manner  stifling  competition,  limiting  production,  restraining  trade, 
regulating  prices,  or  pooling  profits. 

Sec.  2.  No  coercive  measures  of  any  kind  shall  be  practiced  or 
adopted  toward  any  retailer,  either  to  induce  him  to  join  the  asso- 
ciation, or  to  buy  or  to  refrain  from  buying  of  any  particular  manu- 
facturer or  wholesaler.  Nor  shall  any  discriminatory  practices  on 
the  part  of  this  association  be  used  or  allowed  against  any  retailer 
for  the  reason  that  he  may  not  be  a  member  of  the  association,  or  to 
induce  or  persuade  him  to  become  such  member. 

Sec  3.  No  promises  or  agreements  of  any  kind  shall  be  requisite  to 
membership  in  this  association,  nor  shall  any  penalties  be  imposed 
upon  its  members  for  any  cause  whatsoever. 

Abticlb  IV. — Membership. 

Sec.  1.  Any  person,  firm  or  corporation  regularly  engaged  in  the 
retail  implement,  vehicle  or  hardware  trade,  carrying  an  assorted 
stock  of  implements,  vehicles  or  hardware  reasonably  commensurate 
with  the  demands  of  his  community,  shall  be  considered  a  regular 
retail  implement,  vehicle  or  hardware  dealer,  and  be  eligible  to  mem- 
bership in  this  association. 

Sec  2.  The  membership  fee  shall  be  dollars   ($ ), 

payable  in  advance,  and  this  fee  shall  cover  the  dues  for  one  year 

from  date  of  certificate.    The  annual  dues  thereafter  shall  be 

dollars  per  year. 

Betail  dealers  having  more  than  one  store  shall  be  considered  as 
members  only  at  points  for  which  they  have  taken  memberships. 

Sec  3.  The  membership  fee  and  annual  dues,  as  provided  in  the 
preceding  section,  when  paid,  shall  entitle  the  party  to  membership 


II 


II 


I 


312 


FABM-MAOHIKEBT  TRADE  A8S00IATI0KB. 


and  to  all  the  rights  and  privileges  of  this  association  to  the  end  of 
the  year  for  which  such  dues  are  paid,  and  no  longer;  but  member- 
ship may  be  renewed  for  each  successive  year  by  the  pre-payment  of 
the  annual  dues  for  any  such  year,  unless  the  board  of  directors  shall, 
for  cause,  determine  mat  the  party  is  undesirable,  or  ineligible  to 
membership. 

Sec.  4.  Any  member  may  withdraw  from  membership  in  this  asso- 
cisliQn  at  any  time  by  giving  written  notice  to  the  secretary  of  such 
wiliidrawal,  and  by  surrendering  his  certificate  of  membei-shap.  Any 
member  going  out  of  the  retail  miplement,  vehicle  or  hardware  busi- 
ness which  entitled  him  to  membership^  shall  be  deemed  to  have 
withdrawn  from  membership. 

Sec,  5.  Any  member  withdrawing  from  membership,  or  ceasing  to 
be  a  member  for  any  reason,  shall  not  be  entitled  to  refund  of  mem- 
bership fee,  or  of  any  annual  dues,  or  any  part  thereof,  but  the  same, 
and  the  whole  thereof,  shall  belong  to  the  association  absolutely. 

AsnoLi  y. — Officers  and  their  4uHe»,* 

Sec.  1.  The  affairs  of  this  association  shall  be  managed  by  a  presi- 
dent, vice-president,  and  a  board  of directors,  including  the 

president,  vice-president  and  secretarjr,  who  shall  be  ex-officio  mem- 
bers thereof.  The  president  and  vice-president  shall  be  elected 
annually.  Tlie  balance  of  the  directors  ^all  be  elected  as  follows: 
One-half  for  one  year  and  one-half  for  two  years,  and  one-half  to 
be  elected  yearly  thereafter,  to  hold  office  for  the  term  of  two  years; 
all  officers  to  be  elected  by  ballot.  It  shall  be  the  duty  of  the  presi- 
dent, or,  in  his  absence,  the  vice-president,  to  preside  at  all  meetings 
of  this  association.  The  directors  shall  have  the  power  to  hold  meet- 
ings at  such  times  as  they  may  deem  proper,  to  make  or  amend 
by-laws  for  carrying  into  effect  the  objects  of  this  association;  to 
appoint  committees ;  to  print  and  circulate  documents  in  the  interest 
of  this  association;  to  disbui^se  the  funds  of  this  association;  to 

>  In  tbe  copy  of  thp  constitution  furnished  to  tbe  Bartaa  of  Corpontions,  a  line  has 
been  d»wn  throai;h  the  words  •' 'etail   imi»k>ment.  vehicle  or  hardware"  in  this  para 
gnpb,  and  tlie  words  "  wMcli  entitled  him  to  membership  "  are  inserted  in  pencil  on  the 

Margin. 

«  Snbseouently  Articles  V  and  VI  were  consolidated.  Article  V  of  the  present  constitu- 
tioa  of  the  Western  Retail  Implement  Vehicle  &  Hardware  AssociaUon  furnished  the 
Bureau  reads  as  follows  : 

AsTicLX  V. — OfUcen  and  Their  Dutiea. 

8«c.  1.  The  aflFairs  of  this  Association  shall  be  managed  by  a  Board  of  Director! 
consisting  of  a  President,  Vice-President,  Secretary-Treasurer,  and  eight  (8)  Directors. 

Sec.  2.  The  President  and  Vice-President  shall  be  elected  annually.  The  Directors 
ahaU  be  first  elected  as  follows :  Two  for  one  year,  two  for  two  years,  two  for  three 
jmars,  and  two  for  four  years;  thereafter  two  Directors  shall  be  elected  annually  for 
a  ^rm  of  four  years.  Above  named  Officers  and  Directors  to  be  elected  by  ballot. 
The  Secretary-Treasurer  shall  be  elected  by  the  Board  of  Directors,  as  hereinafter  pro- 
Tided.  The  Officers  and  Directors  shall  serve  until  their  successors  are  elected  and 
duly  qualified.  _ 

Sbc.  3.  Executive  Comwtitiee. — The  President,  Vice-President  and  Secretary,  ex- 
ofBcio,  are  constituted  the  Executive  Committee  of  this  Association.  In  all  matters 
relating  to  reports  made  by  this  Association  between  the  sessions  of  the  Board  of 
Directors,  the  said  Committee  shall  have  the  same  powers  as  those  conferred  upon 
the  said  Board  of  Directors.  Upon  the  request  of  the  Secretary,  said  Committee  shall 
convene  to  determine  such  matters  as  are  not  clearly  defined  by  the  Articles  of  Asso- 
ciation, or  such  other  questions  as  he  deems  of  great  importance  to  the  Association. 

8bc.  4.  Pretiding  Officers. — It  shall  be  the  duty  of  the  President,  or  in  his  absence. 
the  Vice-President,  to  preside  at  all  meetings  of  this  Association,  and  of  the  Board  of 
Directors,  or  Executive  Committee. 

Sec.  5.  Auditing  Committee. — The  President  shall  immediately  preceding  the  annual 
■laeting,  appoint  a  committee  of  two  from  the  membership  and  one  from  the  Board  to 
examine  the  accounts  of  the  Secretary-Treasurer  and  report  at  said  meeting. 

8bc.  6.  Board  of  Directora. — The  Board  of  Directors  shall  have  power  to  hold  meet- 
at  such  times  as  they  may  deem  proper ;  to  make,  or  amend  by-laws  for  carrying 


i 


EXHIBITS. 


313 


employ  a  suitable  person  as  secretary,  at  such  salary  as  in  their 
judgment  will  be  for  the  best  interests  of  the  association;  and  de- 
vise and  carry  into  execution  such  other  measures  as  they  may 
deem  proper  to  promote  the  welfare  of  this  association.  All  resolu- 
tions of  the  board  of  directors  may  be  authenticated  by  the  signature 
of  the  president  and  the  countersignature  of  the  secretary.  The 
directors  shall  be  paid  their  necessary  expenses  in  attendance  upon 
meetings  of  the  board,  or  acting  under  the  instructions  of  the  board. 

Election  of  Secretary-Treasurer. 

Sec.  2.  It  shall  be  the  duty  of  the  board  of  directors  after  each 
annual  meeting  to  elect  a  secretary-treasurer  for  the  term  of  one 
year,  who  shall  give  bond  to  be  approved  by  the  board  of  directors, 
for  the  faithful  performance  of  the  duties  of  his  office.  They  shall 
fix  his  salary;  but  such  salary  shall  not  be  in  excess  of  the  sum 
which  said  board  may  reasonably  expect  to  receive  from  the  mem- 
berships of  this  association. 

Duties  of  Secretary-Treasurer, 

Sec.  3.  Upon  election,  the  secretary  shall  become  a  member  of  the 
board  of  directors,  to  serve  during  his  term  of  office,  and  to  have  a 
full  voice  in  the  management  of  the  affairs  of  this  association,  dur- 
ing the  time  which  he  may  serve. 

It  shall  be  the  duty  of  the  secretary-treasurer  to  keep  the  minutes 
of  this  association,  and  to  keep  a  strict  account  of  all  moneys  belong- 
ing to  the  association.  He  shall  make  an  itemized  report  at  each 
annual  meeting  of  the  business  of  the  previous  year. 

The  secretary  shall  notify  each  member  of  this  association  of  the 
annual  or  special  meetings  at  least  ten  days  previous  to  such  meeting. 

The  board  of  directors  shall  prescribe  and  determine  what  other 
service  he  shall  give  to  the  association  during  the  term  of  his  office. 

Into  effect  the  objects  of  this  Association ;  to  appoint  committees ;  to  print  and  circu- 
late documents  in  the  interest  of  this  Association ;  to  disburse  the  funds  of  this 
Association,  and  devise  and  carry  into  execution  such  other  measures  as  they  may 
deem  proper  to  promote  thi  welfare  of  this  Association.  All  resolutions  of  the  Board 
of  Directors  may  be  authenticated  by  the  signature  of  the  President  and  the  counter- 
signature of  the  Secretary-Treasurer. 

Sac.  7.  Examining  Books. — The  Board  of  Directors  shall  examine  the  books  of  the 
Secretary-Treasurer  as  often  as  they  may  deem  necessary,  and  if  they  shall  find  any- 
thing not  satisfactory  to  themselves,  they  shall  at  once  report  the  same  to  the  Presi- 
dent, who  shall  have  power  to  remove  the  Secretary -Treasurer  with  consent  of  the 
Board. 

Sec.  8.  Vacancies. — Should  a  vacancy  occur  in  any  of  the  offices  of  this  Association. 
the  Board  of  Directors  shall  appoint  a  successor  to  serve  until  the  next  annual 
meeting. 

Sbc.  9,  Election  of  Secretary-Treasurer. — It  shall  be  the  duty  of  the  Board  of 
Directors  after  each  annual  meeting  to  elect  a  Secretary-Treasurer  for  the  term  of  one 
rear,  who  shall  give  good  and  sufficient  bond,  to  be  approved  by  the  Board  of  Direc- 
tors, for  the  faithful  performance  of  the  duties  of  his  office.  They  shall  fix  his 
salary ;  but  such  salary  shall  not  be  in  excess  of  the  sum  which  said  Board  "may 
reasonably  expect  to  receive  from  the  memberships  of  this  Association. 

Sac.  10.  Duties  of  Secretary-Treasurer. — Upon  election,  the  Secretary  shall  become 
a  member  of  the  Board  of  Directors,  to  serve  during  his  term  of  office,  and  to  have  a 
full  voice  in  the  management  of  the  affairs  of  this  Association,  during  the  time  which 
be  may  serve. 

It  shall  be  the  duty  of  the  Sccretarv-Treasurer  to  keep  the  minutes  of  this  Associa- 
tion, and  to  keep  a  strict  account  of  all  moneys  belonging  to  the  Association.  He 
shall  make  an  itemized  report  at  each  annual  meeting  cf  the  business  of  the  previous 
year. 

The  Secretary  shall  notify  each  member  of  this  Association  of  the  annual  or  special 
meeting  at  least  ten  days  previous  to  such  meeting. 

The  Board  of  Directors  snail  prescribe  and  determine  what  other  service  he  sliaU 
five  to  the  Association  during  his  term  of  office. 


\w 


II 


814 


VABM-MAGHINBBY  TRADE  ASSOCIATIONS. 


BmecuUve  Oommitiee, 


Sec.  4.  The  president,  vice-president  and  secretary,  ex-officio,  are 
constituted  the  executive  committee  of  this  association.  In  all  mat- 
ters relating  to  reports  made  by  this  association  between  sessions  of 
the  board  ol  directors,  the  said  committee  shall  have  the  same  powers 
as  those  conferred  upon  the  said  board  of  directors.  That  upon  the 
request  of  the  secretary,  said  committee  shall  convene  to  determine 
such  matters  as  are  not  clearly  defined  by  the  articles  of  association 
or  such  other  questions  as  he  deems  of  great  importance  to  the  asso- 
ciation. 

Abticlb  Yl.— Duties  of  Olflcer$,^ 

Sec.  1.  Presiding  Officer.  It  shall  be  the  duty  of  the  president,  or, 
in  his  absence,  the  vice  president,  to  preside  at  all  meetings  of  this 
association,  or  its  board  of  directors.  In  the  absence  of  both  presi- 
dent and  vice  president,  the  directors  in  order  of  their  seniority  shall 
preside. 

Sec.  2.  Vice  President  In  the  absence  of  the  president  the  vice 
president  shall  perform  the  duties  of  the  president. 

Sec.  3.  Directors,  It  shall  be  the  duty  of  the  board  of  directors, 
after  each  annual  meeting,  to  elect  a  secretary-treasurer  for  a  period 
not  exceeding  one  year,  on  such  terms  as  may  be  agreed  upon. 

The  directors  shall  examine  the  books  of  the  secretary-treasurer  as 
often  as  they  mav  deem  necessary,  and  if  they  shall  find  anything  not 
satisfactory  to  themselves,  they  diall  at  once  report  the  same  to  the 
president,  who  shall  have  power  to  remove  the  secretary-treasurer 
with  consent  of  the  board  oi  directors. 

The  president  shall  immediately  preceding  the  annual  meeting 
appoint  a  committee  of  two  from  the  membership  and  one  from  the 
board  to  examine  the  accounts  of  the  secretary-treasurer  and  report 

at  said  meeting. 

Should  a  vacancy  occur  in  any  of  the  offices  of  this  association,  the 
board  of  directors  shall  appoint  a  successor  to  serve  imtil  the  next 
annual  meeting. 

The  board  of  directors  may  make  such  bj-laws,  not  inconsistent 
with  the  provisions  of  the  foregoing  declaration  of  purpose  and  these 
articles,  as  to  them  may  seem  necessary  and  practicable  for  the  proper 
management  and  conduct  of  the  affairs  of  this  association. 

Sec.  4.  Secretary-Treasurer.  It  shall  be  the  duty  of  the  secretary- 
treasurer  to  keep  safely  all  moneys  of  the  organization  received  by 
him  from  any  source,  and  pay  out  the  same  on  consecutively  num- 
bered vouchers,  approved  by  the  president  and  attested  by  him  as 

secretary.     He  shall  give  a  bond  in  the  sum  of  Dollars, 

(J — I )  to  be  approved  by  the  board  of  directors. 

He  shall  keep  the  minutes  of  the  meetings  of  this  organization  and 
of  the  board  of  directors,  and  keep  a  strict  account  of  all  moneys 
belonging  to  the  same.  He  shall  make  a  report  at  each  annual  meet- 
ing of  the  work  of  the  previous  year. 

The  secretary  shall  notify  each  member  of  the  annual  and  special 
meetings  at  least  ten  days  previous  to  such  meetings. 

The  board  of  directors  shall  prescribe  and  determine  what  other 
service  he  shall  give  to  the  organization  during  the  term  of  his  office. 

1  See  footnote  on  v».  S12-313. 


/ 


i 


EXHIBITS. 


Abticlb  Vll.— Reports  io  Secretary.* 


315 


Sec.  1.  Any  member  of  this  association  having  knowledge  of  a 
sale  by  a  manufacturer  or  wholesale  dealer  or  his  agents  to  other 
than  a  regular  dealer  within  the  territory  of  such  member,  may 
notify  the  secretary  of  this  association  in  writing,  giving  as  full 
information  in  reference  thereto  as  practicable,  such  as  date  or  dates 
of  shipment  and  arrival,  original  point  of  shipment,  names  of  con- 
signor and  consignee,  and  such  other  particulars  as  may  be  obtain- 
able. 

Such  notice,  if  filed  at  all,  must  be  sent,  with  or  without  informa- 
tion in  detail,  within  a  reasonable  time  after  receipt  of  shipment  at 
point  of  destination,  and  no  notice  shall  be  filed  of  any  such  sale  or 
shipment  occurring  within  fifteen  days  after  date  of  said  member's 
'Certificate  of  membership. 

Upon  receipt  of  such  written  notice,  the  secretary  shall  imme- 
diately verify  such  report  so  far  as  practicable. 

Sec.  2.  Ail  sales  or  shipments  made  to  other  than  regular  dealers 
by  commission  merchants,  agents  or  brokers,  shall  be  considered  as 
though  the  same  were  made  directly  by  the  manufacturer  or  whole- 
saler from  whom  such  commission  merchants,  agents  or  brokers 
secure  such  goods  or  shipments. 

Sec.  8.  Each  member,  when  he  joins  this  association  and  once 
each  year  thereafter  (and  oftener  if  the  board  of  directors  shall  re- 
quest it)  is  expected  to  furnish  the  secretary,  when  called  upon  to 
do  so,  a  list  of  those  manufacturers  and  wholesalers  and  agents, 
from  whom  he  buys. 

AbtioiiB  Ylll.— Meetings, 

Sec.  1.  Annual.  The  annual  meeting  of  this  association  shall  be 
held  at  such  time  and  place  as  the  board  of  directors  may  determine. 

Sec.  2.  Special.  Special  meetings  of  this  association  may  be  called 
by  the  board  of  directors  when  in  the  opinion  of  the  board  such 
meetings  are  necessary. 

Sec.  3.  Notice.  Members  shall  be  notified  by  mail  of  annual  and 
special  meetings  at  least  ten  days  previous  to  such  meetings. 

Abticlb  IX. — Compensation  of  Officers. 

All  officers  and  directors  of  this  organization  shall  be  entitled  to 
have  their  necessary  expenses  paid  when  attending  meetings,  or 
acting  under  the  instructions  of  the  board. 

Abticlb  X. — Quorum. 

A  quorum  of  this  organization  for  the  transaction  of  business  shall 
be  a  majority  of  its  board  of  directors. 

Abticlb  XI. — Am^endments. 

Amendments  to  these  articles  may  be  made  at  any  regular  meeting, 
or  special  meeting  called  for  that  purpose,  by  a  vote  of  at  least  two- 
thirds  of  the  members  present  and  voting. 

*At  the  meeting  of  the  National  Federation  In  October,  1910,  it  recommended,  by 
unanimous  vote,  that  sections  1  and  2  of  this  article  be  omitted  from  the  constitution  of 
each  constituent  association.  Each  of  the  latter  was  adylsed  to  take  prompt  action  in 
•iMcatlTe  aeaaion  on  the  matter.     (See  pp.  160,  161.) 


;  i 


816 


FABM-MAOHIKESY  TBADB  ASSOCIATIONS. 


In  case  of  necessity,  of  which  the  board  of  directors  shall  be  the 
sole  judge,  such  board  may  amend  these  articles,  and  such  amend- 
ment shall  hold  good  until  the  next  following  meeting  of  the  asso- 
ciation. 


Exhibit  25. 

TTNIFOBM  ABTICLES  01*  ASSOCIATIOir  BECOMMENDED  BY  NA- 
TIONAL EEDEKATION  OP  IMPLEMENT  A  VEHICLE  DEALEBS' 
jynOGIATIONS  FOB  ADOPTION  BT  LOCAL  CLUBS  OF  DEALEBS. 

« 

Articles  and  By-Laws  op  Local  Club,  Number  — ,  of  Association 


Adopted 


PREAMBLE. 


191- 


We  acknowledge  the  interest  and  value  to  the  retail  dealers  of  the 
State  Associations  and  the  Federation,  and  yet  we  realize  the  need 
of  a  closer  and  more  personal  community  of  interest  among  the 
Betail  Implement,  Vehicle  and  Hardware  Dealers  in  our  own  terri- 

Believing  that  the  intimate  association  in  a  social  club  will  induce 
a  more  cordial  and  friendly  feeling  among  us,  thereby  avoiding 
Srtrife  and  enabling  us  to  be  mutually  helpful  to  one  another  in  mat- 
ters of  Credits,  Cx)llections  and  Reduction  of  Operating  Expenses, 
we  have  adopted  the  following  Articles  for  the  regulation  of  our 
Local,  and  cordially  invite  the  regular  Implement,  Vehicle  and  Hard- 
ware Dealers  of  this  section. to  join  with  us  and  participate  in  the 
pleasures  and  benefits  of  our  social  organization. 

CLUB  articles. 


Abticlb  I. — Name. 

This  Chib  shall  be  known  as  Local  Number  —  of 


Abticli  n.— Od/ec*. 

Its  object  shall  be  social  enjoyment  and  entertainment,  together 
with  such  benefits  in  a  business  way  as  will  naturally  be  brought 
about  by  a  feeling  of  fraternity  and  good  fellowship  among  its 
membership. 

AsncLB  III. — TerrUonf. 

The  territory  proper  of  this  Local  shall  be in  the 

g^l^  0f J  though  dealers  in  adjoining  territory  may  be  re- 
ceived on  same  terms  and  conditions  if  they  desire  to  do  so. 

AsncLi  tV.—Be8tfiction. 

No  Article  or  By-Laws  shall  be  adopted  which  will  conflict  with 
the  regulations  of  the  constituent  association  under  which  this  Club 
IB  OTgmized,  nor  with  those  of  the  National  Federation  of  Betail 


i 


XXHIBIT8. 


317 


Implement  and  Vehicle  Dealers'  Associations,  of  which  it  is  a 
membw. 

Abtiou  Y.—MembersMp, 

Section  1.  Any  person,  firm  or  corporation  engaged  in  selling  at 
retail  Agricultural  Implements,  Vehicles  or  Hardware,  maintaining 
a  regular  place  of  business,  and  carrying  on  hand  at  all  times  a  stock 
of  goods  reasonably  sufficient  for  the  territory  where  located,  shall 
be  considered  a  regular  dealer  and  eligible  to  membership  in  this 

club. 

Section  2.  The  membership  fee  shall  be dollars,  payable 

in  advance,  which  shall  cover  the  dues  for  the  first  year.  The 
annual  dues  thereafter  to  be dollars  per  year. 

Section  3.  Signing  these  Articles  and  payment  of  membership  fee 
*  shall  entitle  an  applicant  to  full  membership,  unless  objection  be 
made,  in  which  case  a  majority  vote  of  members  present  shall  be 
required  to  elect. 

Section  4.  Any  member  may  be  expelled  bv  a  majority  vote,  or 
may  withdraw  at  any  time  by  surrendering  his  membership  card. 
Also  anyone  going  out  of  the  business  which  made  him  eligible  shall 
be  considered  as  withdrawn. 

AimcLB  VI. — Officers  and  their  Duties, 

Section  1.  The  affairs  of  this  Club  shall  be  conducted  by  a  Presi- 
dent, Vice-President,  and  a  Secretary-Treasurer,  who  in  addition  to 
performing  the  usual  duties  of  such  office,  shall,  ex-officio,  constitute 
an  Executive  Committee,  which  shall  have  and  exercise  the  full 
authority  of  the  Club  in  the  interval  between  meetings. 

Section  2.  The  President,  by  and  with  the  consent  of  the  Club, 
or  of  the  Executive  Committee,  shall  appoint  standing  committees 
of  three  members  each  on  Entertainment,  Grievance,  and  Credits  and 
Collections. 

Section  3.  The  Entertainment  Committee,  under  general  direction 
of  the  Club  or  Executive  Committee,  shall  be  charged  with  the  duty 
of  planning  and  providing  suitable  entertainment,  literary  or  other- 
wise, for  the  various  meetings  of  the  Club.    . 

Section  4.  The  Grievance  Committee  shall  be  expected  to  investi- 
gate and  adjust  smj  difference  arising  between  members  of  the  Club, 
and  anyone  continuing  to  remain  a  member  shall  be  expected  to  abide 
by  the  decisions  of  the  Grievance  Committee,  subject,  however,  to 
an  appeal  by  either  party  to  the  Club  or  Executive  Committee. 

Section  6.  The  Committee  on  Credits  and  Collections  shall  from 
time  to  time  devise  and  submit  for  the  approval  of  the  Club,  such 
plans  as  in  their  judgment  may  be  for  the  best  interest  of  the  mem- 
bers along  this  line,  and  shall  perform  such  other  duties  as  may  be 
assigned  them  by  the  Club  or  Executive  Committee. 

Section  6.  AH  officers  and  standing  committees  shall  hold  their 
office  for  one  year,  or  until  their  successors  are  elected  and  qualified. 

Abticle  VII. — Meetings. 

Section  1.  Kegular  meetings  shall  be  held  as  the  Club  may  from 
time  to  time  direct,  but  special  meetings  may  be  held  at  any  time  or 


H 


tit 
ill 

II 

II 
I 


|| 


il 


318 


VABM-MAOHnnSBY  TRADE  ABSOOIATIOKa 


I>lace  on  call  of  the  President,  or  of  any  two  members  of  the  Eiectt- 
tive  Committee. 

Skction  2.  Any  number  of  members  shall  constitute  a  quorum  for 
the  transaction  of  business,  except  where  an  expulsion  or  an  appeal 
is  to  be  considered,  without  previous  notice  to  members  of  such  pro- 
posed consideration,  in  whicn  case  a  majority  of  the  Club  members 
must  be  present  to  make  such  decision  binding.  Two  shall  constitute 
a  quorum  of  the  Executive  Committee  at  any  time. 

AixiGLE  YJII.—BihLawa  ami  Amendmaiilt. 

Sectiok  1.  The  Club  or  the  Executive  Committee  may  enact  from 
time  to  time  such  By-Laws  as  may  be  found  necessary  &r  the  carry- 
ing out  of  the  provisions  of  these  Articles. 

SBcnoN  2.  The  Club  Articles  or  the  By-Laws  may  be  amended  by 
a  two-thirds  vote  at  any  regular  meeting  or  special  meeting  of  the 
Oub,  provided  a  majority  of  the  members  are  present,  or  that  reason- 
able notice  had  been  given  the  members  of  sach  proposed  changiw 


ExHiBrr  26. 

HUKBEB  07  MEMBERS  Qg  RETAIL  IMPLEMENT  DEALERS'  ASSO- 
CIATIONS AFFILIATED  WITH  THE  NATIONAL  FEDERATION  OF 
IMFLEMENT  A  VEHICLE  DEALERS'  ASSOCIATIONS,  1001-1913.' 


Name  of  usodatkm. 

iffn 

1902 

1903 

1904 

1905 

1906 

1907 

Western  B«tail  Implenieiit,  Vehicle  &  Hard- 
wan  Assodatkni 

1,000 

240 
230 

100 

1,100 

331 
120 

UO 

1,100 

306 
1ft) 

180 

1,300 

100 
333 

1,3S0 

68 
340 

1,360 

36 
386 

Laoo 

87 
340 

188 

IT7 

106 
180 

190 

98 

Nebraska  &  Western  Iowa  Retail  Imptomeat 

DflalflTs'  A.'wociatioii 

Iowa  Implement  Dealers'  Assodatfon 

Tri-State  Vehicle  A  Implement  Dealers'  Asso- 
dation 

Michigan  Retail  Implement  &  Vehicle  Deal- 
ers'Association 

90 

110 
119 

130 

160 
110 

m 

136 

Minnesota  Retail  Implement  Dealers'  Aasoeia- 
tlon 

Texas  Hardware  A  Implement  Association . . . 
Illinois  Retail  Implement  Dealers'  Associa- 
tion  

143 
107 

IGO 
107 

100 
100 

396 
80 

Wisconsin  Retail  Implement  it  Vehide  DeaU 
ers'  Association 

Betafl  Implement  Dealers'  Assoeiatkm  of 
South   Dakota,   Southwestern  Minnesota 
A  Northwestern  Iowa 

137 

Ul 

147 

336 

136 

104 

If 

71 

Colorado  Retail  Hardware  A  Implement  As- 
soeiatian 

North  Dakota  A  Northwestern  Minnesota 
Implement  Dealers'  Association... 

lOS 

63 
176 

88 

166 
44 

106 
4S 

n 

The  'Oklahoma  Retail  Hardware  A  Imple- 
ment Dealers'  Association 

19 
280 

10 
310 

83 

86 

Eastern  Vehicle  Dealers'  Association 

Bonthwestem  Kansas  A  Oklahoma  Assocbk- 
tion 

Rloe  Belt  Association 

8 

U 

18 

Montana  Implement  Dealers'  Assodatlmi 

22 

Total 

1,0S» 

2,378 

3,455 

3,574 

3,335 

3,366 

3,756 

« 


'KJI 


# 


^ 


.1 


319 


Vmiiber  of  members  of  retaU  implement  dealers*  associations  afJUiated  toith  the 
National  Federation  of  Implement  d  Vehicle  Dealers'  Associations,  1901- 
ISlS—ConUnued. 


Name  of  association. 

1908 

1909 

1910 

1911 

1912 

1913 

Western  Retail  Implement,  Vehicle  A  Hardware  As- 
sociation  

1,400 
260 
188 

210 
105 
150 
214 

114 

1,400 
325 
300 

307 
128 
125 
232 

200 
60 

85 
90 

35 

88 

60 

1,400 
350 
400 

400 
200 
350 
250 

250 
100 

175 
150 

35 

75 

60 

1450 
400 
450 

375 
200 
350 
250 

175 
125 

200 
125 

100 

100 

1,600 
450 
450 

350 
275 
850 
200 

200 
225 

200 
200 

125 

100 

1  000 

Iowa  Implement  Dealers'  Association 

fiTS 

Trl-State' Vehicle  &  Implement  Dealers'  Association.. 
Michigan  Retail  Implement  A  Vehicle  Dealers'  Asso- 

400 

am 

Minnesota  Retail  Implement  Dealers'  Association 

Texas  Hardware  A  Implement  Association 

600 

Illinois  Retail  Implem^t  Dealers'  Association 

Wisconsin  Retail  Implement  A  Vehicle  Dealers'  Asso- 
ciation.  

150 

Mid- West  Retail  Implement  Dealers'  Assocbtion 

350 

Retail  Implement  Dealers'  Association  of  South  Da- 
kota, Southwestern  Minnesota  A  Northwestern  Iowa. 

Colorado  Retail  Hardware  A  Implement  Association. . 

The  Mississippi  Valley  Implement  A  Vehicle  Dealers' 
Association 

124 

74 

100 
100 

100 

N(»th  Dakota  A  Northwestern  Minnesota  Implement 
Dealers' Association 

100 
60 

ISO 

The  Oklahoma  Retail  Hardware  A  Implement  Deal- 
ers'Association 

Vlr^taJa  A  North  Carolina  Retail  Implement,  Machin- 
ery &  Vehicle  Dealers' Association*. 

50 
50 

50 

New  York  State  Retail  Implement  A  Vehide  Dealers' 
Association 

48 

50 

50 

50 

Fennsylyania  A  New  Jersey  Retail  Implement  A  Ve- 
hicle Dealers' Association 

100 

Total 

2,999 

3,492 

4,245 

4,350 

4,725 

5,126 

I  Tba  Faeifle  Northwest  Hardware  A  Implnttent  Assodation  and  the  Montana  Implement  Dealers' 
Aaoeiattan  ww  repmoited  by  thair  seoretarte  as  ddegates  in  tha  annual  oanyentlon  v  Oet  U,  14.  and 
lifltM. 


Exhibit  27. 

CARD    ENTITLED    "SIMPLE    SUGGESTIONS    ON    COST    FIGURING," 
ISSUED  IN  DECEMBER,  1909,  FOR  INFORMATION  OF  DEALERS.' 

First,  Charge  interest  on  the  net  amount  of  your  total  investment 
'  at  the  beginning  of  your  business  year  exclusive  of  real  estate. 

Second,  Charge  rental  on  all  real  estate  or  buildings  owned  by  you 
and  used  in  your  business  at  a  rate  equal  to  that  which  you  would 
receive  if  renting  or  leasing  it  to  others. 

Third,  Charge  in  addition  to  what  you  pay  for  hired  help,  an 
amount  equal  to  what  your  services  would  be  worth  to  others,  also 
treat  in  like  manner  the  services  of  any  member  of  your  family  em- 
ployed in  the  business  not  on  your  regular  pay  roll. 

Fourth,  Charge  depreciation  on  all  goods  carried  over  on  which 
you  may  have  to  make  a  less  price  because  of  change  in  style,  damage 
or  anv  other  cause. 

Fifth,  Charge  depreciation  on  buildings,  tools,  fixtures  or  any- 
thing else  suffering  from  age  or  wear  and  tear. 

Sixth,  Charge  amounts  donated  or  subscriptions  paid. 

Seventh,  Charge  all  fixed  expense,  such  as  taxes,  insurance,  wat^r, 
lights,  fuel,  etc. 

Eighth,  Charge  all  incidental'  expense  such  as  drayage,  postage, 
office  supplies,  livery  or  expense  of  horses  and  wagons,  telegrams  and 
telephones,  advertising,  canvassing,  etc. 

>  Itallciied  words  In  this  exhibit  were  printed  in  black-face  type  in  original. 


0 


f  Hi 


)ll 


I 


i 


380 


FABM-MAOHINBBT  IIUDB  ASSOOIATIOire. 


Ninth.  Charge  losses  of  every  character  including  SP°^^}^?' 
sent^t  and  not  charged,  alWances  made  customers,  bad  debts,  etc 

Tenth.  Charge  collection  expense. 

Eleventh.  Charge  anv  other  «»?««»«  not  «»"'«« J**?;^,?^ J^.  _-^_ 

Twelfth.  When  you  have  ascertained  the  sum  of  all  the  foregoing 
itemTprove  it  by  your  books,  and  you  will  have  your  total  expense 
fSe^Jelr,  ttien  Lide  this'figureV  the  total  ojf  your  sales  and  it 
will  show  the  per  cent  which  it  has  cost  you  to  do  busing. 

Thirteenth.  Ifi^^  this  per  cent  and  deduct  it  from  the  pnce  of  ai^ 
nrticle  vou  have  sold,  then  subtract  from  the  remainder  what  it  cost 
you  (i/voirprice  .id  freight)  and  the  result  will  show  your  net 

"^'tZ^h^^olT^.  selling  prices  of  the  various  articles  you 

'^'^^rfAtt^rseS^ri^Sbe™^ 
take  the  total  expensed  of  the  old  year  and  divide  this  by  the  total 
S  your  p^chases  for  the  old  ye»r^(mvoice  .price  and  Wht)  and 
the  result  wUl  be  the  per  cent  to  add  to  invoice  and  freight  to  cover 
S^^,  thm  add  youfprofit  and  you  have  your  selling  pnce. 


Exhibit  28. 

CoBT   Educationai,   A880ciation-£ompo8H)   or   Manotactotbrs, 
^BBEBS,    Rktau,   Mebchanm,   Trade    Papebs   and    Tbaveuno 

Organized  for  the  purpose  of  improviM  buriness  «>n^ti?«»  i^.^' 

«ffig  of  Agriculfiral  ^^^£tf}^jt^^^^ 
through  more  correct  knowledge  of  the  "Coet«  of  Doing  uusineas. 

gtroQEsnoMS  iro.  i. 

In  offering  the  within  suggestions  and  rules  we  do  so  with  the 
kn^ledge  that  no  two  business  houses  are  on  the  same  baas  either 

"'f£e'"£kt^g?oTexSnL''nne  can  not  safely  be  applied  to 
anottier^OT  should  any  general  average  of  expense  be  used,  you 
Muirteow  for  YOTJKSiir  what  touk  expenses  are  and  in  the  very 
woK  out  of  them  you  will  be  rewarded,  for  to  know  «^ery  impor- 
tmtdetoil  of  your  business  not  only  puts  you  m  command  but  you 
S^tlos^a^  dollar  unknowingly  as  is  now  true  in  many  cases 

""SpSJci&Sown  in  the  wilWn  suggestions  can  be  applied 
to  any  retail  business  with  profit.  If  every  merchant  can  be  induced 
to  ^7oyiA<>  in  his  seUing  prices  all  his  costs,  rumous  competition  will 
^p^ar,  for  the  meaiuVe  of  profit  can  safely  be  left  with  the  man 
who  knows  his  exact  expense. 


,' 


EXHIBITS. 


■XPLANATIOIT    (OF   ITEMS   ON    OPPOSITE   PAGE    [iN   TABLE   BELOW]). 


321 


1.  Taxes.  Include  all  taxes  and  licenses. 

2.  Insurance.  Fire  and  all  protection  except  life  insurance. 

3.  Fuel,  light  and  water. 

4.  Rent.  Include  rent  of  all  property  used  in  the  business  or  if 
owned  by  you,  consider  an  amount  equal  to  what  it  would  cost  if 
rented  from  others. 

5.  Salaries.  Include  amounts  to  cover  salaries  of  proprietor,  part- 
ners, officers  or  members  of  their  families  employed  in  the  business, 
equal  to  what  their  services  would  command  elsewhere,  if  not  already 
on  your  pay  roll. 

6.  Clerk  hire.  Incl.  canvassers  and  extra  labor. 

7.  Advertising.  Include  all  monejr  expended  in  advertising,  or  en- 
tertainment of  customers  in  promoting  trade. 

8.  FjXfress,  telephone  and  telegraph.  Include  all  amounts  ex- 
pended for  these  items  where  not  added  to  invoice  price  of  goods  or 
charged  to  customer. 

9.  Office  supplies,  postage,  etc.  Include  all  bills  for  stationery, 
ink,  pens,  pencils,  postage  stamps,  etc. 

10.  Store  supplies.  Include  all  bills  for  wrapping  paper,  twine, 
boxes,  crating,  brooms,  etc. 

11.  Livery,  drayage,  etc.  Figure  in  all  expenses  of  these  items 
where  hired  of  others. 

12.  Horses  and  wagons.  If  owned  by  you  figure  all  expenses  of 

their  upkeep. 

13.  Repairs.  This  item  should  include  all  amounts  paid  to  keep 
buildings  in  order  if  not  figured  in  rent,  also  repairs  on  fixtures  and 
equipment. 

14.  Depreciation.  Include  a  proper  deduction  (some  say  10%) 
from  your  last  inventory  of  fixtures,  tools  and  other  personal  prop- 
erty subject  to  decline  in  value  because  of  wear  and  tear.  Also  de- 
preciate goods  carried  over  which  can  not  be  sold  at  full  or  regular 

prices. 

16.  Deductions.  Include  amounts  allowed  customers  for  damage 
or  any  cause  whatever. 

16.  Donations  and  subscriptions.  Include  money  or  goods  do- 
nated to  charity  or  public  enterprises.  (Private  charities  not  in- 
cluded.) 

17.  Losses.  Include  notes  and  accounts  which  are  imcollectible, 
also  amounts  paid  attorneys  for  collections,  and  goods  lost  or  stolen 
or  sent  out  and  not  charged. 

18.  Miscellaneous  expenses.  Include  all  expenses  not  provided 

for  above. 

19.  Interest  on  total  investment.  Figure  interest  on  your  total 
assets  at  the  beginning  of  your  business  year  (cash,  notes,  accounts, 
merchandise,  etc.).  If  this  is  done  it  insures  your  getting  profits  at 
least  equal  to  interest  had  your  capital  been  loaned  instead  of 
invested. 

68248'— 15 21 


'.Sk 


1% 


il 


322 


FABM-MACHINEBY  TRADE  ASSOCIATIONS. 


COST  OF  DOING  BUSINESS — YK4BLT  STATEMENT. 


1.  Tnm. •..•... 

12.  Home  and  Wagwis. 

13.  Repairs 

3.  TnimraiiM 

H.  IHnraciatka 

3.  Fntl.  Tftriit.  Wittr.  Etc. 

1>.  Dtdnctkniii ........,-- 

4  B«Bt 

16.  Doitati<nis  asd  Subscriptions 

17.  T/fflUMff 

&  SalariM 

«.  OtrkHira 

18.  Miscellaneous  expenses 

19.  Intwest  on  Total  Investment 

Total  expense 

&.  Exprws,  Ttl«ph.  and  Teleg 

«.  Offiot  Supplies,  Postage,  Etc 

Totel  sales. 

10.  Stan  Snovlies      

11.  Livery.  DraTase.  Etc. 

^,4,^ 


«l 


Per  Cent — Cost  of  doing  business. 

Bum: — ^Divide  Total  Expense  by  Total  Sales  and  result  will  be  per 
cent  of  cost  to  do  business. 

To  fix  selling  prices  see  rule  on  next  page  [below]. 

TABLE  FOB  FINDING  THE  SELLING  PRICE  OF  ANY  ABTIOLE. 


Net  per  cent  profit  desired. 

Cost  to  do 

business. 

1 

2 

3 

4 

5 

6 
79 

7 
78 

8 

9 

10 

11 

12 

13 

14 

15 

20 
65 

25 

60 

30 

35 

40 

50 

im 

84 

83 

S3 

81 

80 

77 

76 

75 

74 

73 

72 

71 

TO 

55 

50 

45 

35 

10% 

83 

82 

81 

80 

79 

78 

77 

76 

75 

74 

73 

72 

71 

TO 

69 

64 

59 

54 

49 

44 

34 

17% 

82 

81 

80 

79 

78 

77 

76 

75 

74 

73 

73 

71 

TO 

69 

6S 

63 

58 

53 

48 

43 

33 

|MJl 

81 

80 

79 

78 

77 

76 

75 

74 

73 

73 

71 

TO 

69 

68 

67 

62 

57 

52 

47 

42 

32 

19m 

80 

79 

78 

77 

76 

75 

74 

73 

73 

71 

TO 

69 

68 

67 

66 

61 

56 

51 

46 

41 

31 

30^ 

79 

78 

77 

76 

75 

74 

73 

73 

71 

TO 

69 

68 

67 

66 

65 

60 

55 

50 

45 

40 

30 

21% 

78 

77 

76 

75 

74 

73 

73 

71 

TO 

69 

68 

67 

66 

65 

64 

59 

54 

49 

44 

39 

29 

HVyL 

77 

76 

75 

74 

73 

72 

71 

TO 

69 

6S 

67 

66 

65 

64 

63 

58 

53 

48 

43 

38 

28 

39% 

7e 

75 

74 

73 

73 

71 

70 

69 

68 

67 

66 

65 

64 

63 

62 

57 

52 

47 

42 

37 

27 

^ 

75 

74 

73 

72 

71 

TO 

60 

68 

67 

66 

65 

64 

63 

62 

61 

56 

51 

46 

41 

36 

26 

74 

73 

73 

71 

TO 

69 

68 

67 

66 

65 

64 

63 

62 

61 

60 

55 

50 

45 

40 

35 

25 

BULE. 

Divide  the  cost  (invoice  price  with  freight  added)  by  the  fi^re  in 
the  column  of  "  net  rate  per  cent  profit  desired  "  on  the  line  with  per 
cent  it  costs  you  to  do  business. 

Example: 

If  a  wagon  cost $60.00 

Freight 1. 20 

61.20 

You  desire  to  make  a  net  profit  of 5% 

It  costs  yon  to  do  business 19% 

Take  the  figure  in  column  5  on  line  with  19  which  is  76 

76 1 61.2000  I  $80.52=the  selUng  price. 

^608        

400 
380 
200 
152 


^ 


EXHIBITS. 


Exhibit  29. 


323 


COST  SYSTEM  BECOMMENDED  FOR  THE  USE  OF  THE  MEMBERS  OF 
THE  NATIONAL  IMPLEMENT  AND  VEHICLE  ASSOCIATION  OF  THE 
UNITED  STATES  OF  AMERICA. 

(Published  bj  the  AssocUitioii,  1912.     General  Offices:  76  W.  Monroe  Street,  Chicago. 

Illinois.) 


[Index  omitted.] 


FOREWORD. 


The  value  of  an  adequate  system  of  Costs  to  a  modern  business 
is  undiluted,  for  the  greater  portion  of  our  trade  evils,  particularly 
those  or  competition,  result  from  lack  of  knowledge  of  these  essen- 
tials. If  the  line  separating  profit  from  loss  is  not  illuminated  and 
made  to  stand  clearly  before  us  by  our  cost  and  expense  figures, 
how  can  we  hope  for  gain  and  growth?  It  is  rather  to  emphasize 
this  than  to  present  a  perfect  system  that  these  suggestions  are 
compiled. 

The  present  system  is  the  result  of  the  revision  of  a  similar  plan 
published  by  the  National  Plow  Association  and  compiled  by  its 
Secretary,  Mr.  C.  E.  Sanders,  under  the  direction  of  Mr.  G.  W. 
Crampton,  who  continues  as  Chairman  of  the  Committee  on  Manu- 
facturing Costs  of  this  Association.  This  revision  was  submitted 
by  Mr.  Crampton  at  the  Annual  Convention  of  the  National  Imple- 
ment &  Vehicle  Association  at  Cleveland,  Ohio,  October  24,  1912. 
The  Convention  ordered  the  publication  of  the  system  for  the  use 
of  the  members. 

The  principles  of  this  system  are  of  general  application,  and  they 
can  be  used  oy  all  concerns  in  the  lines  comprehended  within  the 
term — '^  Farm  Operating  Equipment." 

THE  SYSTE3I  IN  OUTLINE. 

The  method  of  determination  of  the  cost  of  production,  and  mar- 
keting or  distribution  of  any  article,  involves  many  considerations 
and  the  detailed  treatment  of  the  elements  of  this  cost.  In  general 
the  total  cost  is  made  up  of  the  cost  of  manufacture,  and  the  cost  of 
marketing  or  distribution.  Each  of  these  main  divisions  includes  so 
many  elements  that  it  is  considered  advisable  to  set  forth  in  outline 
the  phases  which  will  be  considered.    They  are  as  follows : 

1.   COST  OF  GOODS  IN   WAREHOUSE. 

This  includes  all  manufacturing  expense  imder  the  following  head- 
ings : 

(a)  Costs  of  material. 

(b)  Costs  of  labor. 

(1)  Productive  labor. 

(2)  Non-Productive  labor. 

(c)  Other  manufacturing  expense. 

2.   BALES   AND   ADMINISTBATIVE   EXPENSE. 

Sales  and  Administrative  Expense  is  considered  under  two  head- 
ings depending  upon  whether  the  distribution  is  to  the  jobber  or  to 
the  retail  dealer. 


^ 


II 


I 


324 


VABM-MAOHUnBBY  TBM»£  ASSOCIATIONS. 


••  VOVAL  KZPENSK. 


The  totil  expense  is,  of  course,  the  sum  of  all  contributing  elements 
considered.  If  the  delivered  cost  is  desired,  freight  charges  should 
be  added. 


THE  SYSTEM  IN  DETAIL. 


The  Cost  ow  Goods  in  Wabbhouss. 


MATEBIAL, 


Items  Included. 

Steel 

Malleables 

Lumber 

Bolts 

and  all  other  materials. 

General  Considerations, 

All  material  should  be  considered  at  Cost  Price. 

In  figuring  steel  and  lumber  use  sizes  purchased,  i.  e.,  use  size  and 
weight  before  drilling,  punching  or  cutting  is  done. 

A  proper  percentage  for  waste  should  be  allowed,  including  waste 
bv  errors  in  manufacture  or  defective  material  or  material  rendered 

obsolete. 

An  amount  should  be  figured  and  reduced  to  a  percentage  to  cover 
loss  in  using  material  not  according  to  specifications  or  material  pur- 
chased from  jobbing  stock  on  which  there  is  waste. 

This  percentage  should  also  include  extra  freight  paid,  bonus 
prices  and  all  differences  in  prices  paid  in  excess  of  contract  on 
which  costs  are  based. 

Unless  provided  for  by  an  interest  charge  on  capital  and  surplus, 
as  explained  under  Other  Manufacturing  Expenses,  the  interest 
charge  should  be  added  to  cost  of  material  by  reason  of  carrying 
charges  on  material  from  the  average  date  of  purchase  imtil  the 
average  date  of  delivery  of  goods  in  the  warehouse.  In  the  figuring 
of  this  average,  material  carried  on  inventory  should  be  taken  into 
account.  In  figuring  the  cost  of  lumber,  which  is  carried  on  longer 
time,  the  carrying  charge  should  be  considered. 

LABOB. 

All  labor  is  divided  into  two  general  classes— Productive  labor  and 
Non-J*roductive  labor. 

Productive  labor  is  the  labor  put  directly  on  the  article  under 
manufacture.  Non-Productive  labor  is  that  labor  which  is  not  asso- 
ciated directly  with  the  article  under  manufacture,  but  is  necessary 
for  the  operation  of  the  factory. 

Productive  labor  may  be  figured  for  each  individual  job,  i.  e., 
for  each  implement  or  article  and  is  determined  directly  from 
workmen's  time  slips. 

Non-Productive  labor  on  the  contrary  must  be  figured  in  a  dif- 
ferent manner.  The  most  practical  means  is  to  separate  the  items 
of  productive  and  non-productive  labor  and  determine  the  ratio  of 


% 


m$ 


^'  t    t 


f  ■  >i 


I: 


il 


EXHIBITS.  325 

the  total  non-productive  labor  of  the  factory  to  the  productive 
labor  for  a  given  period,  such  as  a  month,  or  year.  After  such  a 
figure  has  been  obtained  with  sufficient  accuracy,  the  percentage  may 
be  used  to  apply  to  the  productive  labor  to  any  article  imder  manu- 
facture and  secure  the  cost  of  non-productive  labor  on  the  article. 

1,  Productive  Labor, 
Items  Included. 

1.  Day  work. 

2.  Piece  work. 

3.  Boxing  or  crating  for  domestic  trade. 

4.  Boxing  or  crating  for  foreign  trade,  etc 

General  Considerations. 

Under  this  heading  should  be  included  only  the  actual  specific 
labor  performed  on  any  piece  of  work. 

Care  should  be  taken  to  allow  sufficiently  for  changing  dies,  forms, 
etc.,  unless  accounted  for  in  Non-Productive  labor.  Labor  lost  upon 
work  which  is  defective  or  which  is  spoiled  in  manufacturing  should 
be  considered.  It  is  in  these  two  items  that  there  is  oftentimes  an 
underestimate.  If  there  is  an  underestimate  the  amount  of  produc- 
tive labor  in  each  article  is  figured  too  low,  likewise  the  non-pro- 
ductive labor  which  is  based  upon  productive  labor  (explanation 
later)  is  figured  correspondingly  too  low,  and  the  total  labor  costs 
suffer  from  the  double  error.  To  guard  against  an  underestimate, 
a  check  should  be  made  monthly  of  the  productive  labor  in  total  by 
making  a  comparison  of  the  total  productive  labor  as  figured  on  the 
cost  sheets  with  the  total  productive  labor  shown  by  the  pay  roll  or 
labor  account,  and  if  the  cost  sheets  show  less  productive  labor  than 
the  total  of  the  pay  roll,  add  the  proper  percentage  to  cover  this  dif- 
ference.    (See  System  of  Accounts.) 

Illustration. 

Pay  Roll : 

Total  wages  paid  for  productive  labor  in  all  departments  for 

the  month $5, 000. 00 

Cost  Sheet: 

Productive  labor  on  implements  finished  and  partly  finished  dur- 
ing the  month j. 4, 750. 00 

Loss 250. 00 

which  is  five  per  cent  of  the  actual  productive  labor  cost.  This  per- 
centage, therefore,  should  be  added  to  the  productive  labor  items 
shown  on  the  cost  sheet  in  computing  the  cost  of  any  tool. 

Non-productive  labor. 

Items  Included. 

1.  Foreman  and  department  clerks. 

2.  Engineers  and  firemen. 

3.  Oilers  and  elevator  men. 

4.  Watchmen  and  gate  keepers. 

5.  Teamsters  and  helpers,  except  one-half  for  shipping. 

6.  Roustabouts. 

7.  Expert  work,  viz.,  analysis  of  paint,  iron,  etc. 

8.  Lining  fumaoes. 


Hill 


><l 


II 


326 


FAEM-MACHINEBY  TKADE  ASSOCIATIONS. 


9.  Changing  dies  (unless  charged  in  productive  labor). 

10.  Repairs  on  returned  implements. 

11.  Changing  over  implements, 

12.  Experimental  work. 

13.  Extra  labor  on  Fair  goods. 

14.  Cost  of  taking  inventory. 

15.  Miscellaneous  (any  other  items  not  specified  above  which  art 
non-productive  labor). 

16.  Labor  on  maintenance  of  plant : 

Bepairs  on  tools  and  machinery, 
Bepairs  on  fixtures. 
Repairs  to  plant. 
Repairs  to  patterns. 

17.  Shipping  cost  (unless  included  in  Sales  and  Administrative 
Expenses). 

General  Congiderations, 

The  total  of  the  items  above  in  dollars  and  cents  should  be  re- 
duced to  a  percentage  of  the  total  productive  labor.  Having  ob- 
tained this  percentage  it  is  easy  to  obtain  the  non-productive  labor 
cost  for  any  article  by  applying  the  percentage  found  to  the  pro- 
ductive labor  on  the  article. 

• 

Illustration, 

If  the  productive  labor  of  any  article  amounts  to  $1.00  plus  the 
loss  of  5%  as  illustrated  under  the  subject  of  productive  labor,  thus 
making  the  actual  productive  labor  $1.05  and  the  non-productive 
labor  when  reduced  to  a  percentage  amounts  to  80%,  84c  would 
be  the  amount  to  add  to  the  productive  labor,  making  the  total  labor 
on  the  article  $1.89. 

Method  of  Apportioning  Labor, 

In  order  to  carry  out  the  foregoing  instructions,  a  record  should 
be  kept  of  the  distribution  of  labor,  separating  the  productive  from 
the  non-productive  labor  as  well  as  from  items  chargeable  to  other 

accounts. 

This  can  be  accomplished  by  providing  each  foreman  with  a 
printed  list  showing  the  productive  labor  items  and  the  non-produc- 
tive labor  items  separately  as  indicated  above,  and  assigning  to  each 
item  an  account  number. 

The  foreman  should  then  mark  on  the  time  sheet  the  number  of 
the  account  on  which  the  labor  is  expended.  These  time  slips  can 
be  checked  in  the  office  with  the  pay  roll  and  the  percentages  for  pro- 
ductive and  non-productive  labor  ascertained. 

As  the  plan  herein  set  forth  contemplates  the  determination  of  a 
base  price  delivered  in  the  warehouse,  the  shipping  expense  should 
be  figured  as  part  of  the  Sales  and  Administrative  Expenses.  In 
some  cases,  this  may  not  be  convenient  or  desirable,  and  if  so,  the 
shipping  expense  may  be  included  in  Non-Productive  Labor,  in 
which  case  the  prices  would  be  figured  f .  o.  b.  cars  or  depot. 

OTHEB  MANUFACTUBINO  EXPENSES. 

This  division  includes  those  expenses  which  are  incident  to  the 
operation  of  the  factory  but  which  can  not  be  associated  directly  with 


0 


\ 


EXHIBITS. 


327 


a  particular  article  under  manufacture.  It  is  necessary,  therefore, 
to  obtain  the  expense  on  an  individual  article  in  a  roundabout  way, 
and  this  is  best  accomplished  by  determining  the  amoimt  of  such 
expense  and  finding  the  percentage  which  it  is  of  the  labor,  produc- 
tive and  non-productive,  expended  on  the  article.  This  can  be  done 
by  taking  the  expense  over  an  interval  of  time,  a  year  for  example, 
and  obtaining  the  figure. 

I  terns  Inclvded, 

1.  Fuel  under  boilers  and  all  other  fuels  except  for  foundry. 

2.  Water  costs,  if  any. 

3.  General  supplies,  including  files,  emery,  glue,  emery  wheels, 
twist  drills,  reamers,  machinery  oilers,  borax,  tempering  solutions, 
etc. 

4.  Insurance,  fire,  accident,  etc.  (proportion  chargeable  to  manu- 
facturing) . 

5.  Taxes — real  estate  and  personal  (proportion  chargeable  to  man- 
ufacturing). 

6.  Interest  on  borrowed  money  (proportion  chargeable  to  manu- 
facturing) . 

7.  Depreciation. 

8.  Overhead,  including  salaries  of  superintendent,  purchasing 
agent,  timekeepers,  clerks,  etc. 

9.  Barn  account  (one-half  chargeable  to  shipping). 

10.  Factory  stationery  and  supplies. 

11.  Light. 

12.  Donations  chargeable  to  manufacturing. 

13.  Rent  (if  any). 

14.  Miscellaneous. 

General  Considerations. 

In  connection  with  the  inclusion  of  interest,  it  is  recognized  that 
there  are  many  who  oppose  the  application  of  interest  as  an  item  of 
manufacturing  cost.  Others,  however,  among  the  highest  authori- 
ties, for  example — Cole,  Chase,  Nicholson,  etc. — advocate  this  method 
of  accounting,  and  it  is  believed  that  it  is  only  a  question  of  time 
when  it  will  become  universal.  It  is  not  a  difficult  matter  if  desired 
to  apply  the  interest  cost  actually  where  it  belongs.  The  book 
charges  may  be  ignored  and  the  interest  applied  against  each  item 
of  cost,  including  carrying  charges  on  material  and  interest  on  plant, 
up  to  the  point  where  the  goods  are  delivered  in  the  warehouse,  and 
the  selling  interest  cost  (shown  below)  computed  from  the  average 
date  of  delivery  in  the  warehouse  to  average  date  of  payment. 

Others  prefer  to  charge  to  cost,  a  moderate  rate  of  interest  on  the 
capijtal,  surplus,  and  undivided  profits  invested  in  the  plant. 

The  total  of  the  items  above  in  dollars  and  cents  should  be  reduced 
to  a  percentage  of  the  total  productive  and  non-productive  labor  paid 
during  the  year  (less  such  items  as  are  included  in  manufacturing 
expense)  it  is  then  possible,  having  obtained  the  productive  and  non- 
productive labor  costs  as  above,  to  find  the  other  manufacturing 
expense  cost  for  any  article  by  applying  the  percentage  obtained  to 
the  productive  and  non-productive  labor  costs. 

Illustration. 

If  the  total  productive  labor  on  a  given  article  amounts  to  $1.05, 
as  shown  above,  and  likewise  the  non-productive  labor  is  84c,  the 


HI! 


Ill 


I'i 


r 


Li    i  1. 


328 


WMBM-MiJOSaSMMY  XBADB  ▲8800IATI0N& 


total  labor  cost  being  $1.8d,  this  is  the  figure  to  which  the  percentage 
for  other  manufacturing  expense  should  be  applied.  Assuming  that 
this  percentage  is  60%,  then  H^c  will  be  the  "  other  manufacturing 
expense  "  cost  on  this  particular  article. 

Sales  amd  Administsatiti  Bzmin. 

Sales  and  Administrative  expenses  are  considered  under  two  gen- 
eral headings— expense  for  distribution  to  jobbers  and  expense  for 
distribution  to  retail  dealers. 

The  method  of  determination  of  the  cost  for  these  two  classes  of 
distribution  is  shown  separately  below. 

MSTBIBUTION   TO  JOBBBI. 

Items  Included, 

1.  Shipping  cost  (imless  included  in  Non-Productive  Labor). 

2.  Salaries  and  traveling  expense  of  officers  and  others  such  as 

travelers  or  experts  delegated  to  look  after  the  jobbing  trade. 
8.  Proportion  of  office  salaries  other  than  above  (chargeable  to 
the  jobbing  trade). 

4.  Proportion  of  interest,  insurance,  taxes  and  advertismg,  in- 

cluding wood  cuts,  electrotypes,  postage,  etc.  (chargeable  to 
jobbing  trade). 

5.  Allowances: 

fa)  For  defective  repairs. 

fb)  For  blacksmith  work, 
(c)  Other  allowances  from  invoice  price. 

6.  All  other  items  not  mentioned  above. 

General  Camidertttions. 

As  stated  under  the  heading— Other  Manufacturing  Expenses, 
interest  on  borrowed  money  or  on  the  goods  at  cost  prices,  should  be 
included  and  can  be  figured  from  the  average  date  of  dehvery  m  the 
warehouse  to  average  date  of  payment.  ,  .      -,  „  j 

The  total  of  the  items  enumerated  above  figured  in  dollars  and 
cents  should  be  reduced  to  a  percentage  of  the  annual  sales  after 
deducting  cash  discounts,  sales  freight,  returned  goods,  sales  and 
administrative  expense  and  profit 

lUustroHan, 

Total  annual   sales  of  a   factory   less   cash   discount,   sales 
freight,  returned  goods  and  other  items  leaving  the  net 


StTO&R  cost  __——————.—  —  __———————————•——"••*"""""■"*"**""■*""* 

Sales  and  Administrative  expense  applicable  to  the  Jobbing 
trade,  one-fourth  of  total  of  $15,000  or — — _— —  ?3,7W 

Sales  and  Administrative  expense  applicable  to  the  retaU  trade, 
tliree-fourths  of  total  of  $15,000  or -^-^'^^ 


1100,000 


Profit  estimated  at.. 


15,000 
.-  10,000 


76,000 


Net  cost  F.  O.  B.  cars  factory 

Assume  that  one-half  of  this  amount,  or  $37,500,  is  distributed  to 
the  jobbing  trade.  The  Sales  and  Administrative  Expense,  charge- 
able to  jobbing  trade  is  $3,750.00,  and  the  proper  percentage  to  apply 
in  determining  the  cost  of  any  article  is  10%. 


J 


^'    .if 


i 


EXHIBITS. 


DISTRIBUTION  TO  RETAIL  DEALERS. 


329 


Items  Included. 

1.  Shipping  cost  (unless  included  in  Non-Productive  Labor). 

2.  Salaries  and  traveling  expense  of  officers,  travelers,  etc.,  as 
above. 

3.  The  office  salaries,  including  all  not  chargeable  to  manufactur- 
ing and  jobbing  expense. 

4.  Transfer  expense. 

5.  Loss  on  notes  and  accounts. 

6.  Proportion  of  interest,  insurance,  taxes  and  advertising,  includ- 
ing wood  cuts,  electrotypes,  chargeable  to  retail  sales. 

T.  General  office  expense,  postage,  etc. 

8.  Fair  or  other  exhibition  expense. 

9.  General  expert  work  on  implements. 

10.  Exchange  on  customers'  checks  and  other  collection  expense. 

11.  Allowances: 
'&)  For  defective  repairs. 

b)  For  blacksmith  work. 

c)  Other  allowances  from  invoice  price. 

12.  All  other  items  not  mentioned  above. 

Illustration. 

Assuming  the  same  factory  as  was  illustrated  in  the  paragraph 
preceding,  the  net  cost  of  goods  distributed  through  the  retail  trade 
is  $37,500.  Assume  also  that  the  sum  of  the  items  of  sales  and  admin- 
istrative expense  chargeable  to  the  retail  trade  is  $11,250,  then  the 
percentage  of  the  sales  and  administrative  expense  for  the  retail  trade 
to  the  total  costs  of  goods  to  the  retail  trade  is  30%.  This  percentage 
then  is  to  be  used  in  determining  the  sale  and  administrative  cost  on 
an  individual  article,  which  is  to  be  distributed  through  the  retail 
trade. 

Total  Ck)ST. 
Illustration, 

Coat  of  60-Tooth  lever  harrow. 

Material $4.50 

Productive  labor — 50  cents,  add  5% .525 

Non-productive  labor  80%  of  productive  labor .42 

Other  manufacturing  expense  50%  of  productive  and  non-productive 
labor .  4725 

Total  cost  f.  o.  b.  warehouse 5. 9175 

Distrihution  to  jobber. 

Cost  f.  o.  b.  warehouse $5. 9175 

Sales  and  administrative  expense  10%  of  above  cost .  5917 

Total  cost  f.  o.  b.  cars  factory 6. 5092 

Distribution  to  retail  dealer. 

Cost  f.  o.  b.  warehouse $5. 9175 

Sales  and  administrative  expense  30%  of  above  cost 1. 7752 

Total  cost  t  o.  b.  factory — ■■-„„■ ,,— , 7. 6927 


II 

II 


H 


I 


sao 


FARM-MAGHINEBT  TRADE  ASSOCIATIONS. 


GOODS  SOLD  DEUVEBED. 

If  goods  are  sold  deUvered,  add  the  cost  of  their  freight 

SYSTEM   OF  ACC50UNT8. 

For  use  in  connection  with  the  foregoing  Cost  System  the  follow- 
ing general  system  of  accounts  is  suggested : 

Account  No.  1.  To  include  all  materials  used  in  the  construction 
of  implements.  It  may  be  deemed  best  to  have  separate  accounts 
for  pig  iron,  steel,  lumber,  paints  and  varnishes,  etc. 

Account  No.  2.  To  include  all  Manufacturing  Expense  materials, 
viz.:  Steam,  coal,  machinery  oils  and  all  other  items  not  computed 
directly  in  the  cost  of  implements. 

Account  No.  3.  Productive  Labor  for  all  departments,  except 
Foundry,  as  reported  on  daily  time  cards. 

Account  No.  4.  Non-Productive  Labor,  including  foremen,  factory 
clerks,  laborers,  etc.,  as  reported  on  daily  time  cards  except  Foundry 
and  Shipping  Department. 

Account  No.  5.  Shippers  and  all  labor  handling  finished  goods  at 
warehouse,  loading  cars,  etc.,  as  reported  on  daily  time  cards. 

Separate  accounts  should  be  kept  for  the  Foundry  and  these  will 
be  described  under  the  subject — Cost  System  for  Foundry — which 
follows. 

7AGT0RT  It)RMS. 

The  following  represent  a'  few  forms  necessary  and  applicable  to 
any  implement  factory : 

1.  Workmen's  Daily  Time  Card,  showing  name,  date,  kind  and 
quantity  of  work,  also  prices  paid  for  day  or  piece  work.  A  complete 
record  of  all  workmen's  day  wages  and  piece  work  wages,  approved 
by  the  Superintendent,  should  be  on  me  with  the  time-keeper  to 
check  up  tne  workman's  daily  time  cards. 

2.  Specifications.  A  full  set  of  specifications  showing  every  item 
used  in  the  construction  of  each  machine  should  be  made  up  and  can 
be  used  for  ordering  material  and  for  recording  material  and  labor 
prices. 

3.  Order  Forms.— Loose  Leaf  or  Cards.  For  all  orders  on  factory, 
including  complete  implements  and  parts,  dies,  patterns,  and  repairs 
of  all  kinds.    Written  order  should  be  used  in  every  case. 

4.  Material  Records. — Loose  Leaf  or  Book.  For  keeping  record  of 
each  and  all  kinds  of  material,  including  steel  of  all  kinds  and  sizes, 
malleables,  lumber,  bolts,  etc.  This  book  should  represent  a  record 
of  all  purchase  orders  and  factory  orders  showing  the  waste  or  loss 
in  addition. 

6.  Production  Form.  For  the  use  of  all  departments  to  report 
their  daily  production. 

COST  SYSTEM  FOR  FOUNDRY,  MAKING  GREY  IRON  CASTINGS. 

It  is  recommended  that  a  foundry  be  operated  independent  of  the 
other  branches  of  the  business. 


4  '    1^ 


"♦>•*■/ 


1^  lf<"l 


EXHIBITS. 


331 


All  of  the  principal  materials  are  purchased  by  weight,  the  finished 
product  is  computed  by  weight  and  for  these  reasons  the  Costs  should 
be  easily  obtained. 


SYSTEM  aF  AC5C50UNTB. 


A  system  of  accounts  is  first  necessary  and  the  following  ai« 
suggested : 

1.  Materials  Account. 

This  account  is  to  be  charged  with  all  productive  materials  includ- 
ing pig  iron,  scrap  iron,  coke  for  cupolas,  etc. 

Credit  this  account  with  materials  as  used.  A  daily  record  should 
be  kept  of  all  materials.  This  account  should  correspond  with  inven- 
tory taken  at  the  end  of  the  fiscal  year. 

2.  Manufacturing  Account. 

This  account  should  be  charged  with  all  materials  received  from 
the  material  account  and  all  productive  labor  including  moulders' 
and  core  makers'  wages. 

Credit  this  account  with  all  good  castings  monthly  and  at  a  price 
based  on  costs. 

This  account  should  be  closed  into  the  profit  and  loss  account  at  the 
end  of  the  fiscal  year. 

S.  Other  Manufacturing  Expense  Account. 

This  account  should  be  charged  as  follows: 

Expense  Materials:  Sands  of  all  kinds,  facings,  rosin,  machinery 
oils,  steam  coal,  fuel  for  core  oven,  etc. 

Non-Productive  Labor:  Foremen,  clerks,  laborers,  grinders,  chip- 
pers,  furnacemen,  engineers,  firemen,  etc. 

This  account  should  be  charged  with  the  rent  of  the  building,  or 
interest  on  plant,  power  (if  furnished  from  main  power  plant),  and 
an  amount  as  may  be  agreed  upon  for  Administrative  Expense,  in- 
cluding taxes,  insurance,  depreciation,  etc.  Equipment  subject  to 
especial  or  excessive  depreciation  such  as  flasks  and  follow  boards 
should  be  taken  into  account. 

This  account  should  be  closed  into  Manufacturing  Account  at  the 
end  of  the  fiscal  year. 

General  Considerations. 

The  finished  castings  should  be  carefully  inspected,  weighed  and 
charged  to  the  same  account  as  malleable  castings,  steel  and  other  like 
materials. 

This  set  of  accounts  should  be  charged  with  all  expense  of  operat- 
ing the  foundry  so  as  to  determine  the  exact  Cost  of  its  finished 
product. 

The  total  debit  balance  of  No.  2  and  No.  3  Accounts  for  any  calen- 
dar month  or  year,  divided  by  the  total  good  castings  produced  dur- 
ing the  same  period,  should  give  the  net  Cost  per  pound. 

This  system  can  be  enlarged  upon  by  adding  extra  Accounts  to 
show  the  Cost  of  the  Core  Department  and  Milling  or  Cleaning 
Department. 


»l 


I 


332 


FARM-MACHINEBY  TBADE  ASSOCIATIONS. 


In  a  foundry  making  both  light  and  heavy  castings  it  is  recom- 
mended  that  a  record  be  kept  for  each  class  of  castings,  as  the  hght 
castings  will  cost  considerably  more  than  the  heavy  castings— for 
example— in  an  implement  factory  manufacturing  hght  castings 
for  com  planters  and  heavy  castings  for  hay  pre^s,  ^^  }^^^^^ 
likely  that  the  com  planter  castings  will  cost  as  much  as  $20.00  per 
net  ton  more  than  the  heavy  castings. 

ESBOBS  lO  BE  AVOIDED  IN  THE  USB  OF  A  CX)8T  SYSTEM. 

In  the  application  of  any  cost  system  it  is  easy  to  overlook  many 
important  items  which  may  appear  small  and  perhaps  negligible,  but 
which,  when  combined,  have  a  pronounced  and  unexpected  effect  on 
the  total  cost  of  an  article. 

It  is  the  purpose  of  this  chapter  to  bring  out  some  of  the  common 
errors  appearing  in  the  usual  methods  of  figuring  costs  and  explam- 
ing  how  and  why  they  should  be  avoided. 

In  the  preceding  pages  an  effort  has  been  made  to  explain  every 
step  carefully,  but  perhaps  a  comparison  of  the  commonly  used 
methods  with  the  principles  advocated  m  this  system  will  be  of 
assistance  in  arriving  at  true  costs. 


r«CTCQST 


A.66  ACTUAL  COST 


rmnrmr. 

77 


NATEMAL 
400 


COST 
6O0 


TOTAL 
FACTORY 
COST 
7.00 


TOTAL 
COiT 
7.70 


SELLING 

PRICE 

a47 


The  chart  opposite  [above]  has  been  prepared  by  Mr.  (>•  W. 
Crampton,  and  shows  graphically  the  various  items  of  cost  which 
contribute  to  the  total  cost  and  are  hence  involved  in  determining  the 
selling  price  of  any  article.  The  effect  of  the  various  common  omis- 
sions and  errors  which  will  be  discussed,  is  also  shown. 

It  will  be  seen  that  the  elements  of  the  total  cost  are  the  same  as 
those  considered  m  previous  pages.  The  first  element  is  Material, 
the  next  Labor  (productive  and  non-productive) ;  the  sum  of  these 
two  costs  is  known  as  the  Prime  Cost.  The  Prime  Cost  with  Other 
Manufacturing  Expenses  added  gives  Total  Factory  Cost.  Ihe  lotal 
Cost  includes  m  addition  the  Sales  and  Administrative  Expense;  to 
determine  the  Selling  Price  an  amount  representmg  profit  is  added 

^  For  the  purposes  of  illustration,  actual  fibres  will  be  used,  and  thd 
implement  miaer  consideration  is  a  tillage  implement 


% 


ijl  n 


EXHIBITS. 


838 


The  cost  of  material  is  taken  at  $4.00,  the  Labor  cost  $2.00,  of 
which  $1.00  is  productive  labor  cost,  and  a  like  amount  non-produc- 
tive labor  cost.  The  Prime  Cost  is,  therefore,  $6.00.  The  Other 
Manufacturing  Expense  amounts  to  $1.00  as  commonly  figured,  the 
Sales  and  Administrative  Expense  70c.  The  Total  Factory  Cost  is 
then  $7.00  and  the  Total  Cost  is  $7.70,  with  a  profit  estimated  at  10% 
on  the  cost,  the  Selling  Price  would  he  $8.47. 

It  will  also  be  assumed  that  in  determination  of  the  cost  as  com- 
monly figured,  i.  e., — the  method  which  gives  a  selling  price  of  $8.47, 
there  have  been  no  errors  in  figuring  percentages,  and  that  the  items 
of  cost  as  displayed  by  the  books  have  been  properly  included. 

Consider  now  some  of  the  omissions  and  errors  which  caused  this 
figured  selling  price  of  $8.47  to  be  less  actually  than  the  real  total 
cost.  These  omissions  and  errors  will  be  considered  in  connection 
with  the  various  elements  making  up  the  Total  Cost. 


MATEBIALS. 


It  is  assumed  that  the  concern  making  this  article  puts  its  products 
in  the  warehouse  on  an  average  date  of  February  15th.  In  figuring 
the  costs  of  material  it  has  been  taken  at  invoice  price.  It  did  not 
come  to  the  factory,  however,  on  the  day  it  was  used.  Perhaps  there 
was  a  large  supply  of  the  material  carried  over  from  one  season  to 
another.  In  fact  it  is  safe  to  say  that  in  order  to  place  goods  in  the 
warehouse  February  15th,  the  material  will  have  to  be  carried  four 
or  five  months  on  the  average.  Hence  it  will  he  necessary  to  make 
a  carrying  charge  on  the  material^  and  this  will  he  figured  arhi- 
trarily  at  2%, 

Very  likely  some  of  the  material  used  includes  material  bought 
from  store,  material  on  which  extra  freight  had  to  be  paid,  or,  on 
which  there  has  been  a  bonus  price  and  material  purchased  at  a  price 
in  excess  of  contract.  This  cost  of  material  over  contract  prices  is 
placed  arhitrarily  at  ^%,  and  it  is  believed  that  with  the  conditions 
existing  during  the  year  1912,  that  this  is  very  conservative. 

It  is  necessary,  also,  to  include  in  the  Materials  Cost,  the  material 
waited  in  manufacture  and  this  loss  is  taken  arhitrarily  at  2%.  This, 
of  course,  would  be  entirely  too  low  on  wood  work  for  example,  but 
for  the  purpose  of  this  illustration  it  is  better  to  underestimate  than 
to  overestimate. 

From  the  chart  it  will  be  seen  that  the  losses  from  these  three 
sources,  namely — carrying  charges,  extra  costs  over  contract,  wastes 
in  process — increase  the  wMerial  cost  a  total  of  $03^5, 


LABOB. 


One  of  the  commonest  omissions  is  labor  on  waste  material.  Again 
it  has  been  forgotten,  perhaps,  that  each  piece  manufactured  is  not 
turned  out  continuously  throughout  the  year,  but  sometimes  quick 
changes  have  to  be  made  and  day  work  prices  have  to  be  paid  rather 
than  piece  work  prices.  It  will  he  assumed  that  these  omissions 
aggregate  5%. 

Having  figured  the  productive  labor  cost  too  low  and  the  non- 
productive cost  heing  hosed  on  the  productive^  a  douhle  error  is  made 
80  that  it  is  necessary  to  add  a  similar  percentage — 6%  to  non-pro- 


■■■ 


ll  ^It 


S34 


PAKM-MACHINEBY  TRADE  ASSOCIATIONS. 


dueUve  labor,  even  if  nio  error  is  made  in  the  computation  of  non- 
productive labor  itself. 

OTHER   UANUFACTUBIHO  EXPENSE. 

Other  Manufacturing  Expense  is  based  on  the  total  labor,  and  on 
account  of  the  errors  in  the  labor  cost,  the  Other  Manufacturing  Ex- 
pense cost  is  too  low. 

In  the  figures  used,  the  Other  Manufacturing  Expense  was  50% 
of  the  total  labor  expended.  After  making  corrections,  total  labor 
is  found  to  be  $2.10  instead  of  $2.00 ;  hence  the  Other  Manufactur- 
ing Expense  should  be  $1.05  or  an  addition  of  five  cents. 

However,  there  is  another  item  which  very  likely  has  been  neg- 
lected, and  that  is  interest  on  the  plant  As  explained  previously, 
many  cost  accountants  do  not  take  this  item  into  consideration,  but 
if  it  is  not  done  the  selling  price  will  be  too  low,  and  its  omission 
will  contribute  to  an  actualloss  on  the  article  when  it  is  believed  that 
it  is  being  made  at  a  very  fair  profit. 

Professor  Wm.  Morse  Cole  of  Harvard  University,  an  authority 
on  the  subject,  says : 

I  believe  accountants  are  coming  more  and  more  largely  to  favor  the  treat- 
ment of  interest  on  plant  as  cost ;  at  least  the  number  taking  this  side  is  com- 
ing to  my  attention  rather  frequently.  The  main  argument  can  be  stated  in  a 
few  words;  if  interest  is  disregarded  heavy  costs  for  equipment  may  be  in- 
curred to  make  a  slight  saving  in  labor  and  the  reduction  in  labor  cost  will 
show  in  the  annual  figures;  whereas  the  cost  (in  interest)  of  the  equipment 
does  not  Fhow ;  and  thus  the  investment  in  labor  saving  machinery  may  appear 
as  a  great  saving,  whereas  in  reality  (due  to  the  interest  on  investment)  it 
actually  has  caused  a  loss. 

A  5%  interest  charge  on  the  plant  will  he  figured,  and  in  order 
to  arrive  at  a  ready  working  figure  it  is  assumed  that  each  $1.00  of 
plant  will  produce  $1.50  in  goods  at  cost  prices.  This  figure  is  con- 
servative. Figuring  in  this  way,  an  addition  of  $0,245  should  be 
added  to  the  cost  corrected  for  errors  in  basing  on  labor. 

The  total  error  in  Other  Manufacturing  Expense  amounts  then  to 
$0£95. 

SALES  AND  ADMINISTRATIVE  EXPENSE. 

This  was  figured  on  a  basis  of  10%  of  the  total  Factory  Cost  but 
on  account  of  the  error  in  the  factory  costs  already  explained,  there  is 
an  underestimate  of  4c  in  Sales  and  Administrative  Expense. 

Interest  on  sales  has  probably  been  neglected.  It  must  be  admitted 
that  the  concern  has  been  out  the  use  of  its  money  from  the  average 
date  of  delivery  of  goods  in  warehouse  to  average  date  on  which 
payment  is  received.  It  will  be  assumed  that  the  average  time  from 
date  of  receipt  in  warehouse  to  payment  is  eight  months,  although  in 
many  lines  this  period  is  much  greater.  Eight  months  interest  at 
5%  should  then  be  added  to  the  cost  of  the  goods  and  this  adds  28c. 

-        COMPARISON  OF  NEW  TOTAL  COST  WITH  SELLING  PRICE  ORIGINALLY  FIGURED. 

From  the  chart  it  will  be  seen  that  on  account  of  the  accumulated 
errors  the  refigured  Total  Cost  is  actually  in  excess  of  the  original 
selling  price,  which  allowed  what  was  supposed  to  be  a  reasonable 
amount  of  profit. 


'^f 


•'  ^ 


P 


EXHIBITS. 


335 


Moreover,  the  above  explanation  does  not  include  or  bring  out  all 
oversights  and  errors,  for  example  the  smaller  amounts  of  interest 
on  the  pay  roll  from  the  average  date  of  payment  to  the  average  date 
of  delivery  of  goods  in  warehouse.  The  same  is  of  course  true  of 
sums  advanced  in  like  manner  on  Other  Manufacturing  Expense, 
and  on  Sales  and  Administrative  Expense.  Likewise,  if  goods  are 
carried  over  one  season  or  the  terms  of  payment  are  extended,  the 
items  of  interest  on  sales  will  be  materially  increased. 

Every  concern  has  expenses  peculiar  to  the  operation  of  its  plant. 
Care  should  be  taken  to  see  that  every  item  of  expense  is  included, 
and  the  following  illustrative  questions  may  well  be  asked  as  sug- 
gestive of  some  of  the  items  which  are  commonly  omitted: 

1.  Are  castings  figured  at  the  price  which  the  foundry  cost  shows 
or  at  a  price  which  contemplates  loss  through  breakage,  through 
riveting,  in  handling,  or  in  any  other  ways  ? 

2.  Are  malleable  cas£ings  figured  at  the  invoice  price  as  rendered 
by  the  malleable  company,  or  at  the  cost  with  shop  loss  added?  If 
figured  at  invoice  price  are  malleables  lost  in  working  the  goods 
through  the  shop  considered  and  charged  in  with  the  cost? 

3.  Are  all  materials  figured  at  contract  prices  regardless  of  length 
of  time  carried  and  additional  bonus  or  store  price  paid  ?  Are  allow- 
ances made  for  waste  of  materials  and  materials  wasted  and  materials 
scrapped  at  the  end  of  the  season  as  obsolete  ? 

4.  Is  lumber  figured  green  or  dry?  Is  the  waste  considered  first 
in  the  pile,  second  in  the  wood  shop  and  third  in  the  process  of  man- 
ufacture ? 

5.  Is  all  labor  considered,  i.  e.,  direct,  wasted  direct  and  indirect? 
Is  not  Other  Manufacturing  Expense  figured  too  low  by  leaving  out 
interest  on  plant,  depreciation,  belting,  twist  drills  and  like  items  ? 

6.  Are  all  Sales  and  Administrative  expense  or  items  shown  in  the 
System  herein  described  considered  and  figured  on  the  proper  basis? 

CONCLUSION. 

Any  Cost  System  in  its  application  must  be  developed  to  meet  the 
peculiar  conditions  of  each  individual  concern.  For  this  reason  the 
System  outlined  is  intended  simply  to  serve  as  a  foundation  on 
which  can  be  built  a  stable  cost  structure. 

All  of  the  principles  given  are  believed  to  be  adapted  to  the  re- 
quirements imposed  by  any  manufacturing  concern,  but  each  step 
must  be  enlarged  upon  and  handled  in  a  manner  that  will  give  the 
most  accurate  and  illuminating  results. 

Cost  study  and  scientific  management  are  in  these  days  being  given 
close  attention,  and  there  are  many  comprehensive  methods  advocated. 
If  the  foregoing  system  is  used  as  a  basis,  however,  it  may  be  elabo- 
rated upon  to  any  extent  desired.  Each  step  taken  should  be  subject 
to  a  careful  analysis  in  order  that  the  accuracy  of  the  results  may  be 
unquestioned. 

It  is  hoped  that  the  system  may  prove  of  value  to  all  members  of 
the  National  Implement  &  Vehicle  Association,  but  if  it  serves  only 
in  a  small  degree  to  increase  the  knowledge  of  costs  of  manufacture 
and  distribution,  it  will  have  achieved  its  mission. 


I 


336 


VABM-MAOHINEBY  TBADB  ASSOCIATIOK& 


Exhibit  30. 


I.OCA*nOir  AHB  NITMBEB  Ol*  TOnntKlia  07  DBAI.EBS'  LOCAL  CLirBS 
OBOANIZEB  FBOM  JASTJABLY  29,  1913,  TO  MAY  29,  1914. 

(lilt  fnrnislied  hj  the  National  Implement  and  Tehlde  Association.) 

[Note  bt  Bubeau. — The  list  inclndes  82  clubs  having  a  membership  of 
1,055.  It  is,  of  course^  understood  that  clubs  were  organized  both  before  and 
after  the  period  here  covered.  On  May  15,  1914,  the  secretary  of  the  National 
Implement  and  Vehicle  Association  reported  that  he  had  records  of  104  clubs 
having  a  total  membership  of  1,148.  The  membership  of  each  clnb  includes 
dealers  located  at  neighboring  towns  or  cities  as  well  as  those  doing  business  at 
the  towns  or.dties  mentioned  in  the  list    (See  p.  232.)  ] 

Colorado  Retail  Hardware  &  Implement  Dealers*  Association:  Members. 

Western  Slope  Hardware  &  Implement  Club,  Delta,  Colo 24 

lUinois  Retail  Implement  Dealers'  Association: 

Local  Club  No.  1,  JacksonvlUe,  111 16 

Macon  County  Implement  Dealers*  Clnb,  Decatur,  111 2 

Iowa  Implement  Dealers*  Association : 

Kossuth  Club  No.  6,  Algona,  Iowa 12 

Credit  Club  No.  7,  Hampton,  Iowa 15 

Tri-County  Club  No.  8,  Iowa  City,  Iowa 11 

Mahaska  County  Implement  Club  No.  9,  Oskaloosa,  Iowa 10 

Ftayette  County  Implement  Industrial  Club  No.  1,  Dounan  Junction, 

Iowa 10 

Linn  &  Benton  County  Implement  Dealers*  Club,  Cedar  Rapids,  Iowa_  15 

Palo  Alto  County  Implement  Dealers'  Club  No.  12,  Emmetsburg,  Iowa_  11 

Cedar  Valley  Local  Club  No.  13,  Waterloo,  Iowa 16 

Jefferson  County  Hardware,  Implement  &  Vehicle  Club  No.  14,  Fair- 
field, Iowa 10 

Ottumwa  Local  Club  No.  15,  Ottumwa,  Iowa 13 

Michigan  Retail  Implement  &  Vehicle  Dealers'  Association : 

Implement  Dealers*  Club  of  South  Michigan,  Adrian,  Mich 14 

Implement  &  Vehicle  Dealers*  Association  of  Grand  Rapids,  Grand 

Rapids,  Mich 10 

Wayne- Washtenaw  Retail  Implement  &  Vehicle  Dealers'  Association, 

Wayne,  Mich 11 

Eastern  Retail  Implement  &  Vehicle  Dealers'  Association : 

Local  Club  No.  1.  Salem,  N.  J 10 

Local  Club  No.  2,  York,  Pa 10 

Local  Club  No.  3,  Newtown,  Pa 12 

Local  Club  No.  4,  Allentown,  Pa 12 

Retail  Implement  Dealers'  Association  of  South  Dakota,  Southwestern 
Minnesota  &  Northwestern  Iowa: 

Local  Club  No.  1,  Centerville,  S.  Dak 12 

Western  Retail  Implement,  Vehicle  &  Hardware  Association : 

Local  Club  No.  48,  Pleasanton,  Kans 12 

Local  aub  No.  49,  Fort  Scott,  Kans 8 

Local  Club  No.  51,  Lebanon,  Mo 11 

Local  Club  No.  52,  Coflfeyville,  Kans 13 

Local  aub  No.  54,  Ellsworth,  Kans 10 

•  Local  Club  No.  55,  Alva,  Okla 14 

Local  Club  No.  56,  Phillipsburg,  Kans 11 

Local  Club  No.  57,  Lincoln,  Kans 10 

Local  Club  No.  58,  McPherson,  Kans 10 

Local  Club  No.  59,  Trenton,  Mo 10 

Local  Club  No.  60,  Stafford,  Kans 16 

Local  aub  No.  61,  Holton,  Kans 11 

Local  aub  No.  62,  Ponca  City,  Okla 16 

Linn  County  District  Association  No.  63,  Brookfield,  Mo 16 

Southwest  Missouri  Retail  Implement,  Vehicle  &  Hardware  Dealers* 

Ai0ociation,  Carthage,  Mo _« ^, 18 


^ 


/ 


^\ 


337 


Wisconsin  Retail  Implement  &  Vehicle  Dealers*  Association:  Members. 

Implement  Dealers'  Social  aub,  Milwaukee,  Wis 35 

Western  Wisconsin  Club  No.  10,  La  Crosse,  Wis 12 

Columbia  County  Retail  Implement  Dealers'  Club,  Portage,  Wis 14 

Fox  River  Valley  Implement  &  Vehicle  Club,  Green  Bay,  Wis 12 

Tri-State  Vehicle  &  Implement  Dealers'  Association : 

Local  Club  No.  7,  Goshen,  Ind 10 

Local  Club  No.  8,  Princeton,  Ind JO 

Local  aub  No.  9,  Sullivan,  Ind U 

Local  Club  No.  10,  Martinsville,  Ind 10 

Local  Club  No.  11,  Greensburg,  Ind 11 

Local  Club  No.  12,  Noblesville,  Ind 11 

Local  Club  No.  13,  Freemont,  Ohio J^ 

Local  Club  No.  14,  Marion,  Ind 20 

Local  Club  No.  15,  Columbus,  Ind 12 

Local  Club  No.  16,  Wabash,  Ind-* 12 

Local  aub  No.  19,  Rockport,  Ind IJ 

Trl-State  Local  No.  20,  Oak  Harbor,  Ohio 16 

Tri-State  Local  Club  No.  21,  Tiffin,  Ohio 13 

Tri-State  Local  aub  No.  22,  Bowling  Green,  Ohio 11 

Trl-State  Local  Club  No.  23,  Upper  Sandusky,  Ohio _ 12 

Mid-West  Retail  Implement  Dealers' Association : 

Cedar  County  Local  Implement  Club,  Laurel,  Nebr 10 

North   Platte  Valley   Implement   Dealers'   Association,   Bridgeport, 

Nebr ^^ 

Local  Club  No.  1,  Osceola,  Nebr 14 

Local  Club  No.  8,  Omaha,  Nebr. — — --— 10 

Southwestern  Iowa  Implement  Dealers'  Club,  Red  Oak,  Iowa lA 

Fillmore  County  (Nebr.)  Local  Implement  Club,  Geneva,  Nebr 11 

Minnesota  Retail  Implement  Dealers'  Association : 

Local  Club  No.  4,  Mankato,  Minn 14 

Local  Club  No.  5,  Preston,  Minn 14 

Local  Club  No.  6,  Rochester,  Minn 17 

Local  Club  No.  7,  Windom,  Minn 1^ 

Local  aub  No.  8,  Detroit,  Minn 14 

Local  aub  No.  9,  Sauk  Center,  Minn 10 

Local  aub  No.  10,  Faribault,  Minn 13 

Ijocal  Club  No.  11,  Crookston,  Minn 17 

Local  aub  No.  12.  Breckenridge,  Minn 14 

Local  Club  No.  13,  New  Ulm,  Minn 10 

Local  Club  No.  14,  Thief  River  Falls,  Minn 11 

Local  Club  No.  15,  Glenwood,  Minn 12 

Local  Club  No.  16,  Elbow  Lake,  Minn 10 

Local  Club  No.  17,  Henning,  Minn 12 

Local  Club  No.  18,  Blue  Earth,  Minn 12 

Local  Club  No.  19,  Bird  Island,  Minn H 

Local  Club  No.  20,  Albert  Lea,  Minn 16 

Local  Club  No.  21,  Marshall,  Minn 14 

Local  Club  No.  22,  Luverne,  Minn 20 

Mower  County  Implement  &  Hardware  aub,  No.  23,  Austin,  Minn__  13 

Local  Club  No.  24,  Hinckley,  Minn__^ 26 


Exhibit  31. 

THE  IMPLEMENT  DEALER  AND  HIS  PROBLEMS— ADDRESS  BT  THE 
SECRETARY  OF  THE  NATIONAL  FEDERATION  OF  IMPLEMENT 
AND  VEHICLE  DEALERS*  ASSOCIATIONS  BEFORE  THE  MEMBERS 
OF  THE  NATIONAL  IMPLEMENT  AND  VEHICLE  ASSOCIATION, 
OCTOBER  22,  1914.^ 

When  your  worthy  secretary  and  general  manager  extended  to  me 
the  invitation  to  address  this  distinguished  body  he  left  open  no  loop- 
holes, no  avenues  of  escape.    He  was  particular,  however,  to  caution 

»  As  reported  in  the  Farm  Implement  News,  October  22,  1914,  pp.  28e-281i. 
68248'— 15 ^22  .  .  - 


388 


FABM-MACHINEBY  TBADE  A5S00IAII0N& 


'I 


Ip  'II  ''-i 


iW^flW  *  J^'u.^'^?''*  """"*  """"y  e^*^^'^'  ''''^  ^^'^  f^ar  t*»at  I  might 
mflict  a  fliffht  or  two  upon  you,  I  have  safeguarded  the  situation  by 
reducing  what  I  have  to  say  to  manuscript    This  wiU  be  reassuring 

I  am  not  unmindful  of  the  importance  and  the  magnitude  of  the 
task  which  your  program  committee  has  set,  but  my  great  interest  in 
this  work  of  improving  conditions  in  the  implement  business 
prompted  me  to  undertake  it,  and  so,  gentlemen,  I  am  here  trying 
to  fit  and  fill  the  place  assigned. 

I  had  the  honor  and  privilege  of  addressing  one  of  your  conven- 
tions when  your  association  was  in  its  infancy  and  have  attended 
most  of  your  conventions  since,  keeping  in  as  close  touch  as  possible 
with  your  work  I  have  come  to  you  on  behalf  of  the  dealers  for 
many  favors  and  have  a  full  appreciation  of  your  many  courtesies 
ana  tor  the  consideration  given  to  requests. 

,  Problems  are  always  difficult  of  right  solution,  and  those  confront- 
ing us  twlay  are  gigantic  ones.  We  need  all  our  energy  and  courage 
m  the  effort  to  find  the  light  demanded  by  all  branches  of  the  trade 
connected  with  our  linked  interests.  We  must  wear  the  yoke  with 
honest  purpose  and  determination  to  bear  our  full  part  of  its  obliga- 
tions. ^ 

The  problem  most  difficult  to  settle  fully  is  how  to  make  a  fair 
proht  m  the  business  of  retailing  implements.  The  average  dealer 
allows  his  mmd  to  be  agitated  by  the  question  "  Will  my  competitor 
maintain  prices  which  permit  a  margin  of  profit  over  and  above  the 
cost  of  domg  business? "  Only  the  dealer  who  is  ever  on  the  alert 
can  hope  for  success.  There  is  too  much  lack  of  confidence,  and 
confadence  is  the  highest  standard  of  trade.  Without  it  there  is  no 
true  fellowship  m  trade  or  in  life.  Honest  methods  make  safe  busi- 
ness and  real  men.  That  dollar  made  by  false  dealing  is  high  in 
price  and  its  possession  too  dear  for  any  man  to  own  it,  for  he  has 
sacrificed  too  much  of  his  better  self  to  make  it.  In  the  business 
problem,  or  social  problem,  there  is  only  one  code,  that  of  upright- 
ness, courtesy,  truth. 

Since  the  organization  of  dealers'  associations  and  of  your  asso- 
ciation, many  changes  have  taken  place  m  the  relations  between 
manufacturer  and  dealer.  But  with  your  experience  and  study  you 
have  come  to  look  upon  the  duties  which  you  owe  to  your  customers 
from  a  broader  viewpoint.  You  have  a  fuller  realization  of  the 
mutuality  of  interests  which  must  obtain  if  the  largest  measure  of 
success  for  all  is  to  be  realized.  Unquestionably  good  results  have 
come  from  your  movement  to  raise  the  standard  of  the  dealers,  suffi- 
cient at  least  to  encourage  you  to  continue  your  co-operation  for  bring- 
mjg  about  more  helpful  relations  in  all  departments  of  our  business. 

Our  associations  have  gone  on  record  as  characterizing  the  co- 
operation which  you  are  giving  us  in  our  efforts  to  improve  condi- 
tions as  the  greatest  achievement  we  have  to  our  credit,  and  on  behalf 
of  those  whom  I  have  the  honor  to  represent  I  express  our  deep  ap- 
preciation of  your  good  will. 

You  are  so  familiar  with  the  resolutions  adopted  by  the  conven- 
tions of  our  associations  and  by  our  federation,  which  are  supposed 
to  summarize  the  problems  which  confront  the  dealer,  that  you  will 
perhaps  be  most  interested  in  an  outline  of  the  work  our  associations 
have  in  hand  which  is  of  mutual  interest  and  a  brief  mention  of 
matters  deemed  of  paramount  importance. 


EXHIBITS. 


EDUCATIONAL  METHODS  NEEDED. 


339 


Ever  present  among  these  is  the  necessity  of  pursuing  continually 
educational  methods.  We  cannot  disguise  the  fact  that  there  is  an 
element  engaged  in  our  business  that  is  lacking  in  knowledge  of 
modern  mercantile  processes.  This  is  said  without  disparagement  to 
this  class,  for  it  is  recruited  from  walks  of  life  that  have  made  a 
study  of  business  methods  unnecessary,  in  fact  impossible.  In  most 
lines  of  merchandising  those  engaged  in  it  have  grown  up  in  the  busi- 
ness. They  have  been  educated  to  it,  not  only  m  the  particular  line 
in  which  they  are  engaged,  but  in  business  methods  in  general.  The 
reverse  is  true  with  too  large  a  percentage  of  those  engaged  in  the 
implement  line.  They  are  not  lacking  in  intelligence,  but  need  sug- 
gestions concerning  those  methods  which  make  for  success. 

The  assistance  you  have  rendered  in  educational  and  local  club 
work  is  evidence  that  you  recognize  the  correctness  of  the  foregoing 
statement. 

There  are  those  who  think  that  our  associations  are  organized  for 
the  sole  purpose  of  compelling  other  branches  of  the  trade  to  respect 
our  rights.  If  any  here  present  have  had  this  impression  I  need  but 
refer  you  to  the  proceedings  of  our  conventions.  These  show  clearly 
that  we  are  trying  as  earnestly  to  remedy  the  troubles  for  which 
we  are  responsible  as  we  are  to  correct  those  which  we  lay  at  the  door 
of  the  manufacturer.  We  are  studying  the  business  and  trying  in 
every  way  possible  to  stop  the  leaks. 

We  are  putting  forth  an  honest  effort  to  make  the  relations  between 
the  manufacturer  and  dealer  more  satisfactory  by  advocating  and 
urging  the  discontinuance  of  the  practices  of  which  you  complain 
and  which  have  been  brought  to  our  attention  by  your  committee  on 
dealers'  associations.    I  refer  particularly  to : 

Unjust  cancellation  of  orders. 

Deducting  cash  discounts  after  bills  are  overdue. 

Delaying  settlements. 

Delaying  reports  of  damage  to  shipments. 

Returning  goods  without  order  or  instructions. 

Giving  free  repairs  without  regard  to  conditions  of  warranty. 

Making  undue  demands  for  expert  help,  and  other  matters  of 

lesser  importance. 

We  are  urging  upon  members  the  necessity  of  giving  the  best  of 

service  to  their  customers  and  are  continually  suggesting  ways  in 

which  this  can  be  done.    We  realize  that  it  is  one  of  the  necessities 

if  we  expect  to  keep  the  trade  in  the  right  channel. 

We  are  recommending  that  they  treat  your  travelers  courteously; 
first,  because  it  is  right;  second,  because  they  are  good  fellows  and 
can  assist  the  dealers  in  many  ways ;  and,  third,  because  discourteous 
treatment  of  the  traveler  is  too  apt  to  result  in  a  sample  agency  with 
the  corner  grocery  or  blacksmith. 

We  are  advocating  that  the  rule  of  requiring  settlements  on  de- 
livery be  adhered  to  and  that  this  subject  be  made  a  topic  for  dis- 
cussion at  club  meetings. 

In  short,  we  are  doing  everything  we  can  to  help  build  up  a  better 
class  of  merchants  and  in  this  work  you  are  vitally  interested.  But, 
gentlemen,  we  must  have  all  of  the  encouragement  you  can  give  us. 
We  can  not  control  our  members  in  these  matters,  but  the  efforts  we 
are  putting  forth  have  already  resulted  in  a  betterment  of  conditions. 


> 


III 


i|(i: 


340 


FABM-MAOHINEBY  TRADE  ASSOCIATIONS. 


The  percentage  of  dealers  who  have  retired  from  the  implement 
business  the  past  year,  taking  the  membership  of  several  large  asso- 
ciations as  a  basis,  shows  a  very  considerable  reduction  oyer  former 
years,  notwithstanding  the  business  conditions  m  much  of  the  terri- 
tory have  been  far  from  satisfactory. 

STANDARDIZATION. 

Our  associations  have  gone  upon  record  as  favoring  standardiza- 
tion. Dealers  while  willing  to  admit  that  they  are  in  a  large  measure 
responsible  for  present  conditions  by  reason  of  demands  made  for 
goods  to  meet  the  whims  of  customers,  have  long  realized  the  dis- 
advantage of  having  to  carry  large  assortments  which  should  not 
be  necessary.  The  general  movement  looking  to  a  reduction  of 
variety  and  the  elimination  of  many  unnecessary  sizes  which  has  been 
started,  as  a  result  of  our  conferences  will  receive  the  support  of 
the  dealers.  Sentiment  is  all  in  favor  of  a  reform,  but  we  were 
powerless  to  take  the  initiative.  We  can  only  supplement  your 
efforts  by  assisting  in  determining  what  sizes  shall  be  considered  as 
standard  and  urging  the  use  of  same.  Dealers  have  no  recommenda- 
tions to  make  as  to  where  the  reforms  should  commence,  whether  on 
wagons  or  disk  harrows,  buggies  or  plows.  This  is  detail  which  will 
be  worked  out  by  the  committees  of  our  respective  organizations  to 
Whom  the  subject  has  been  referred.  The  prospect  of  ultimate  suc- 
cess shows  the  advantage  of  co-operation,  for  there  are  but  few  sub- 
jects of  greater  mutual  interest. 

DEAUERS'  OPENINGS  AND  SPECIAI.  SAI^ES  DAYS. 

In  a  very  commendable  effort  to  reduce  the  cost  of  distribution 
your  officials  and  sales  managers'  department  have  been  discourag- 
ing the  practice  which  has  been  gaining  popularity  among  dealers 
of  holding  openings  and  special  sales  days.  You  are  familiar  with 
the  methods  employed  by  the  dealers  to  draw  crowds  and  the  in- 
ducements offered  to  sell  the  goods,  for  you  are  expected,  in  most 
cases  at  least,  to  contribute  to  the  expense.  Hence  it  is  unnecessary 
to  dwell  upon  that  phase  of  the  question.  .  .     ,,  m- 

For  two  years  past  I  have  endeavored  to  ascertain  the  prevailing 
sentiment  among  experienced  dealers  of  the  profitableness  of  these 
openuiffs  and  find  that  it  is  about  evenly  divided.  Perhaps  those 
who  are  satisfied  with  their  efforts  have  not  analyzed  the  matter 
thoroughly  and  have  not  made  a  careful  estimate  to  ascertain  if 
after  all  the  extra  sales,  those  which  would  not  have  been  made 
during  the  season  anyhow,  really  justified  the  extra  expense.  How- 
ever, it  is  difficult  to  convince  a  dealer  who  succeeds  in  selling  be- 
tween $5,000  and  $6,000  worth  of  goods  in  a  three-days  special  sale 
that  all  his  efforts  have  profited  him  nothing.  In  your  associations, 
as  m  dealers'  associations,  inconsistency  of  members  is  frequently 
apparent,  and  without  referring  to  our  own  shortcommgs,  which 
touch  too  tender  a  spot,  the  cold  truth  is  that  so  long  as  some  of 
vour  members  encourage  dealers'  openings  by  promismg  the  help 
cf  your  special  salesmen,  giving  special  terms  on  sample  goods, 
furnishing  some  article  from  your  Ime  to  be  given  to  the  holder  of 
the  lucky  ticket,  and  so  long  as  your  travelers,  m  order  to  make  a 


I 


^    ^    k 


EXHIBITS. 


341 


V 


showing  of  volume,  encourage  the  dealers  to  put  on  these  sales  with 
u  5  per  cent  special,  free  dinner,  picture  shows,  brass  bands,  etc., 
just  so  long  will  be  delayed  that  reduction  in  distribution  expense 
which  you  hoped  would  come  from  your  efforts  for  a  discontinuance 
of  this  practice  of  the  implement  trade  which  has  added  so  materially 
to  the  cost  of  doing  business. 

CJO-OPERATION  WITH  FARMERS. 

Dealers  are  beginning  to  see  that  there  is  something  else  in  busi- 
ness besides  buying  and  selling  merchandise.  They  are  commencing 
to  take  an  interest  in  the  resources  of  the  country.  They  see  that  if 
they  can  induce  the  farmer  to  try  advanced  methods  that  will  enable 
him  to  raise  more  wheat,  com  and  other  grains,  use  greater  care  in 
the  selection  of  seeds  and  in  diversifying  crops  and  conserve  the  re- 
sources of  the  farm  heretofore  gone  to  waste,  they  are  building  for 
the  future  of  their  own  business.  Many  dealers  are  becoming  inter- 
ested and  taking  a  leading  part  in  the  farmers'  institutes,  they  study 
the  farmer's  problems  and  discuss  them  with  him.  This  is  in  line 
with  advanced  thought  and  must  be  encouraged  and  it  is  a  helpful 
sign  that  they  are  receiving  from  you  just  the  inspiration  they  need. 
Let  this  good  work  go  on.  We  pledge  ourselves  to  do  our  part. 
This  leads  to  a  mention  of  the  farm  adviser. 

FARM  ADVISERS. 

Considerable  encouragement  has  been  given  to  this  movement  both 
by  the  manufacturers  and  dealers.  During  the  past  year  in  an  en- 
deavor to  learn  the  consensus  of  opinion  of  the  dealers  who  have 
been  interested  in  it,  I  found  that  in  a  majority  of  cases  the  results 
are  satisfactory  and  that  merchants  and  farmers  are  anxious  to  have 
the  arrangement  continued.  In  some  localities  the  merchants  are 
enthusiastic.  There  is  one  phase  of  this  question,  however,  to  which 
it  may  be  well  to  call  your  attention — ^the  temptation  which  comes 
to  some  of  these  gentlemen  to  advise  co-operative  buying.  Many 
reports  regarding  this  came  in  connection  with  the  investigation 
made.  You  know  of  the  efforts  of  the  rural  organization  service  of 
the  Department  of  Agriculture  to  exploit  the  suhject  of  co-operative 
buying  of  farm  operating  equipment.  The  farm  advisers  were 
among  those  urged  to  help  in  the  consummation  of  the  plans.  In 
most  cases  the  situation  can  be  handled  by  the  merchants  who  con- 
tribute to  the  farm  adviser's  support,  but  a  word  of  caution  would 
make  them  alert  to  the  importance  of  the  matter  before  it  is  too  late. 

We  are  interested  in  any  movement  that  will  make  better  business 
men  of  the  vast  army  of  implement  dealers  in  this  country.  Our 
associations  have  been  educational  factors.  The  educational  work 
you  have  done  among  our  people  has  brought  ample  returns  and  has 
paid  you  better  dividends  than  any  investment  you  have  made.  The 
fact  that  there  is  a  better  class  of  business  men  conducting  the  im- 
plement business  to-day  than  there  was  a  few  years  ago  proves  the 
statement.  You  might  say  that  there  is  room  for  improvement. 
There  will  ever  be  room  for  improvement,  but  you  cannot  afford,  and 
we  cannot  afford,  to  relinquish  the  efforts  we  have  been  putting  forth. 
The  pamphlet — ^" A  Few  Facts  About  Agriculture  " — issued  by  your 


i 


342 


VABM-MACHIHBEY  TRADB  AS80CUTI0NB. 


EXHIBITS. 


343 


iflsociftlicm  will  accomplish  a  good  pur|)ose  and  we  will  co-operate 
with  you  by  urging  our  people  to  read  it  and  carry  out  its  sugges- 
tions. The_agitation  of  the  cost  educational  movement  has  wrought 
wonders.  TOs  and  the  local  club  work  are  responsible  for  the 
dianged  conditions. 

I/K3AL  CLUBS. 

The  assistance  you  have  given  the  local  club  movement  can  not  be 
too  strongly  commended.  We  appreciate  your  financial  help,  but 
still  more  do  we  appreciate  the  moral  support  you  are  giving  the 
movement.  The  fact  that  the  manufacturers  see  in  the  local  club  a 
remedy  for  many  troubles  that  prevent  the  business  from  showing 
good  results  has  been  an  incentive  to  our  members  to  try  it.  It  can 
not  be  expected  that  every  club  organized  will  make  a  good  showing, 
for  sometimes  mistakes  are  made  in  the  selection  of  officials,  but  the 
improvement  in  many  localities  is  little  Jess  than  remarkable.  We 
trust  that  we  may  have  a  continuance  of  your  assistance.  We  hope 
you  will  instruct  your  traveling  men  to  take  an  active  interest  in  it. 
We  want  their  influence  and  active  help  in  building  up  sentiment  in 
favor  of  the  local  club. 

Our  clubs  are  not  organized  for  the  purpose  of  agreemg  upon  a 
price  schedule,  but  we  do  meet  to  study  cost  accounting,  general  con- 
ditions in  the  trade,  credits,  the  advantage  of  settlements  on  delivery 
and  hundreds  of  other  things  which  suggest  themselves  to  a  body  of 
business  men.  Some  of  our  clubs  arrange  for  addresses  by  attorneys 
upon  the  collection  laws,  garnishment  laws,  employers'  liability  and 
other  important  matters.  You  can  have  no  conception  of  the  splen- 
did work  these  clubs  are  doing,  unless  you  get  out  into  the  territory 
and  personally  attend  the  meetings.  Just  m  proportion  as  this 
movement  expands  will  conditions  improve. 

CROWDING  TERRITORY. 

One  of  the  great  problems  we  have  to  contend  with  is  the  competi- 
tion we  meet  upon  our  own  goods,  caused  by  the  placing  of  agencies 
too  close  together.  A  dealer  may  build  up  ever  so  good  a  reputation 
for  giving  good  service,  making  good  every  promise  made  to  cus- 
tomers, but  when  he  undertakes  to  maintain  a  orice  commensurate 
with  good,  sound  business  principles,  he  will  find  himself  losing  out 
when  a  competitor  in  a  nearby  town  offers  the  same  goods  for  less 
money.  We  know  perfectly  well  that  a  good  salesman  should  talk 
the  superior  merits  of  his  goods  and  he  can  make  it  win  out  against 
an  article  of  another  make  which  is  offered  at  a  lower  price,  but  such 
argument  does  not  count  for  much  as  against  a  lower  price  in  a  com- 
petitive town  on  the  same  goods.  Cases  which  illustrate  this  come 
to  almost  daily  attention.  The  manufacturer  gets  a  greater  volume 
of  business  in  some  cases,  but  the  dealers  wind  up  the  season  without 
profit  and  in  the  end  such  policy  results  disastrously  to  the  manufac- 
turer, for  a  line  of  goods  on  which  a  dealer  can  not  make  a  profit  soon 
becomes  unpopular.  .,       , 

No  dealer  has  a  right  to  expect  to  control  more  territory  than  he 
can  work  successfully.  On  the  other  hand,  when  he  builds  up  a  good 
trade  on  the  line  by  the  liberal  use  of  printer's  ink,  canvassing, 


\ 


#-».| 


4 


M> 


demonstrations  and  Other  ways,  he  is  entitled  to  the  undivided  trade 
of  the  territorv  he  is  covering.  There  is  nothing  so  discouraging  as 
to  find  that  after  spending  a  large  sum  in  advertising  certain  goods 
that  the  dealers  in  several  of  the  surrounding  towns  are  reaping  the 
benefits  of  this,  and  it  does  not  take  a  dealer  long  to  decide  what 
policy  he  should  pursue.  He  simply  concludes  that  he  will  get  rid 
of  the  goods  he  has  on  hand  at  any  sacrifice  I'nd  seeks  another  line. 
As  you  probably  know,  my  office  is  a  sort  of  clearing  house  for  all 
trade  troubles  that  arise  in  about  one-half  of  the  States  in  the  Union. 

Recently  my  attention  was  called  to  a  case  in  point  and  satisfac- 
tory evidence  was  presented  to  prove  the  statements  made.  A  con- 
tract for  a  seasonable  article  was  placed  at  a  central  point  and  at 
five  surrounding  towns.  The  popularity  of  the  article  made  it  pos- 
sible to  place  these  contracts  so  close  together.  A  contract  for 
another  implement,  made  to  do  the  same  work,  was  placed  at  the 
central  point  only.  The  result  of  the  season's  business  was  that  the 
combined  sales  of  the  six  agencies  were  about  the  same  as  the  sales 
made  by  the  dealer  who  had  the  territory  all  his  own  and  he  was 
able  to  maintain  a  price  which  afforded  a  profit  while  the  others 
could  not.  Every  one  of  these  dealers  started  the  season  with  a  good 
list  of  prospective  buyers,  but  they  became  discouraged  early.  You 
might  say  that  they  needed  a  local  club.  Well,  they  were  all  mem- 
bers of  such  an  organization,  but  a  special  salesman  sent  into  the 
territory  for  the  purpose  of  stimulating  his  six  agents  showed  too 
great  eagerness  for  volume  and  the  dealers  relinquished  their  efforts. 

Gentlemen,  is  this  a  problem  for  the  dealer  or  the  manufacturer  to 
settle? 

Again,  we  feel  that  the  dealer  who  is  giving  a  line  an  honest 
representation  should  be  the  judge  of  the  quantity  of  goods  he  needs 
for  his  trade  and  when  he  is  dictated  to  and  told  that  his  trade  re- 

2uires  so  many  goods,  then  the  foundation  is  laid  for  trouble  later. 
)ealers'  warehouses  are  full  of  goods  which  were  ordered  against 
their  better  judgment  simply  because  they  were  told  that  about  so 
many  goods  had  been  assigned  to  their  territory  and  that  unless  they 
would  contract  for  them  it  would  be  necessary  to  curtail  their  terri- 
tory and  place  the  goods  at  competitive  points. 


FARM   PAPER  ADVERTISING. 


Wo  do  not  want  you  to  gain  a  wrong  impression  of  the  dealers' 
attitude  toward  your  policy  of  advertising  in  farm  journals,  many 
of  which  are  most  excellent  mediums  through  which  to  reach  the 
user  of  implements.  We  do  think  that  your  advertisements  in  such 
papers  are  in  bad  company  and  that  a  large  percentage  of  the  in- 
quiries you  receive  are  sent  in  with  the  expectation  of  being  able  to 
buy  direct  at  a  wholesale  price.  We  are  aware  that  well-advertised 
goods  are  easier  to  sell,  but  when  the  dealer  sees  your  advertisements 
alongside  of  those  of  the  mail  order  houses  with  their  exaggerated 
statements  he  wonders  if  you  are  not  helping  to  build  sentiment  in 
favor  of  mail  order  buying.  I  do  not  recall  seeing  many  of  your 
advertisements  that  contained  the  statement  "  Sold  through  dealers 
only."    This  always  looks  good  to  the  dealer  and  if  more  would 


i 


344 


FABM-MACHINBBY  TRiLDE  ASSOCIATIONS. 


adopt  the.  plan  of  using  it  you  would  hear  less  complaint  from 

dealers.  ^  j       •      u 

A  few  years  ago  vigorous  protest  was  made  by  our  federation  be- 
cause your  advertisements  appeared  in  journals  whose  editorials 
were  teeming  with  advice  to  farmers  to  eliminate  the  middlemen  and 
patronize  the  mail  order  houses  exclusively.  Many  of  your  adver- 
tising managers,  perhaps  all  of  them,  gave  these  journals  to  under- 
stand that  such  a  policy  was  not  approved,  and  we  are  pleased  to 
say  that  of  late  the  number  of  these  editorials  has  been  greatly  less- 
ened.   This  relieves  the  situation  to  a  certain  extent. 

You  doubtless  are  aware  of  the  suggestions  which  have  been  mj;  i 
by  dealers  to  the  effect  that  the  manufacturers  would  do  well  to  use 
more  space  in  local  newspapers  and  less  in  farm  journals,  and  a  few 
are  trying  out  the  plan.    We  believe  that  the  subject  concerns  our 

success. 

Circulation  is  not  the  only  element  that  enters  into  successfiil  ad- 
vertising— quality  must  be  considered.  In  many  respects  this  is  the 
more  important  factor  in  publicity.  How  many  of  you  have  ever 
made  a  careful  investigation  of  this  element  of  quality  ? 

In  farm  papers  that  build  up  their  subscription  lists  by  offerirg 
for  50  cents  a  three-years'  subscription  to  a  weekly  journal,  the  pub- 
lished price  of  which  is  one  dollar  annually,  and  give  45  cents  of  that 
to  the  solicitor  who  represents  that  it  goes  to  a  benevolent  fund — the 
element  of  quality  is  lacking.  Particularly  is  this  true  when  the 
efforts  of  the  solicitor  are  confined  to  the  towns  and  cities.  A  circu- 
lation of  this  character  is  all  right  for  the  mail  order  houses,  but 
how  much  good  does  it  do  you? 

ATTENTION  TO  INQUIRIES. 

We  do  not  want  you  to  get  the  idea  that  dealers  as  a  class  fail  to 
give  attention  to  prospects  which  are  referred  to  them  and  which  are 
the  results  of  your  advertising  campaign.    My  reason  for  mentioning 
this  is  that  so  many  complaints  from  manufacturers  have  been  heard. 
You  must  make  allowances  for  the  fact  that  a  very  large  percentage 
of  your  inquiries  in  answer  to  farm  paper  advertisements  come  from 
farmers'  sons  who  are  making  collections  of  catalogs,  or  who  have  a 
curiosity  to  know  prices.    I  have  found  it  necessanr  to  make  some 
inquiries  from  dealers  in  regard  to  this  matter,  for  I  felt  that  if  our 
members  are  not  doing  their  part  their  attention  should  be  called  to 
their  short-comings.     One  member  reported  that  he  had  had  five 
inquiries  for  a  certain  article  referred  to  him.    He  sent  his  canvasser 
to  see-every  prospect,  with  the  result  that  three  out  of  the  five  were 
children,  and  the  other  two  had  not  the  slightest  idea  of  buying.    It 
cost  him  nearly  $20  to  find  this  out.    Another  dealer  reported  having 
received  the  names  of  three  prospective  purchasers.    He  worked  all 
at  a  considerable  expense,  only  to  find  that  the  parties  were  simply 
curious  to  know  what  machines  of  that  kind  cost.    Out  of  reports 
from  about  twenty  dealers  covering  30  or  40  prospects,  all  of  which 
were  worked,  just  two  sales  resulted.    These  statements  are  not  made 
as  an  argument  against  your  farm  paper  advertising,  but  as  a  defense 
of  the  dealers  whom  some  of  you  accuse  of  not  giving  you  a  square 
deal  on  the  inquiries  you  refer  to  them  or  when  you  show  an  honest 


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EXHIBITS. 


345 


desire  to  distribute  your  goods  through  the  proper  channels.  You 
doubtless  have  much  cause  for  complaint,  but  take  into  account  the 
above  statements  and  do  not  censure  the  dealer  too  severely. 


PROLIFIC  CAUSE  OF  FAILURES. 

The  most  prolific  cause  of  failures  among  dealers  engaged  in  the 
implement  business  is  the  fact  that  they  do  not  maintain  prices 
which  afford  a  fair  profit.  The  dealers  who  have  been  injured  by 
this  kind  of  competition  feel  that  the  traveler  can  encourage  his  cus- 
tomers, and  be  of  material  assistance  to  them,  and  we  contend  that  the 
policy  of  the  dealer  in  disposing  of  your  goods  should  be  a  potent 
factor  in  determining  his  credit  rating.  It  surely  is  evidence  of  his 
ability  to  pay  for  the  goods  he  buys  from  you.  The  dealer  who  so 
far  forgets  the  fundamental  principles  of  business  that  he  fails  to 
provide  for  his  overhead  expenses  when  pricing  his  goods,  is  not  a 
good  credit  risk,  to  say  nothing  of  the  hazard  to  a  manufacturer's 
business.  The  latter  sees  his  line  lose  popularity  in  a  community 
simply  because  a  price  has  been  established  which  precludes  all  pos- 
sibility of  making  any  money  on  it.  The  cost  educational  work  is 
having  a  good  effect,  but  the  changes  are  taking  place  so  rapidly  that 
we  need  the  aid  of  every  lawful  influence  that  can  be  brought  to  bear 
for  relief  of  the  situation.  I  am  firm  in  the  conviction  that  you 
should  know  whether  or  not  the  prices  at  which  your  customers  are 
selling  your  goods  are  netting  them  a  fair  profit. 

PROTEC3TION  OF  DEALERS. 

What  the  dealer  needs  more  than  anything  else  is  protection.  You 
have  helped  him  over  the  rough  places;  you  have  been  lenient  and 
have  given  him  liberal  terms — ^too  liberal  sometimes  for  his  own 
good — but  what  he  needs  is  to  be  given  the  retail  trade  unmolested. 
This  is  the  main  plea  I  have  to  make  to  you  at  this  time.  But  you 
say :  "  Not  guilty,  my  factory's  policy  is  to  protect  the  trade  to  the 
fullest  extent."  And  you  are  sincere  in  making  the  assertion,  but 
have  you  ever  taken  the  pains  to  learn  if  your  policy  is  being  carried 
out  to  the  letter  ?  Before  me  are  the  officials  and  the  sales  managers 
of  the  great  manufacturing  concerns  that  compose  the  membership 
of  this  association.  You  are  not  the  men  who  make  the  direct  sales 
to  our  customers — ^you  rarely  ever  hear  of  them.  But  you  may  have 
employes  who,  in  their  eagerness  to  make  a  record,  will  assume  that 
you  are  entitled  to  your  share  of  the  trade  and  that  if  the  dealer  will 
not  handle  your  line  they  are  privileged  to  get  the  business  as  best 
they  can.  We  congratulate  ourselves  that  our  associations  have 
brought  this  matter  to  your  attention  in  such  a  way  that  a  change  for 
the  letter  has  taken  place,  but  there  is  still  room  for  improvement. 

Subterfuges  of  all  kinds  are  resorted  to  to  buy  direct  to  save  the 
dealer's  meager  profit.  Firm  names  are  assumed;  letterheads  are 
printed;  carloads  of  goods  are  ordered  for  future  delivery,  and  a 
wagon,  plow  or  some  other  article  is  ordered  out  at  once,  and  as  soon 
as  it  is  received  the  carload  order  is  canceled. 

Of  course,  all  of  the  direct  sales  are  made  because  the  goods  are 
shop  worn  or  out  of  date ;  or,  perhaps  the  customer  was  listed  in  the 
commercial  agency  books  as  "G.  S."  and  you  took  it  for  granted 


> 


346 


FABM-MACHINSBY  TBADE  ASSOCIATIONB. 


m. 


that  a  general  store  stock  included  implements;  perhaps  the  customer 
had  some  thought  of  engaging  in  the  implement  business  and  wanted 
a  plow  or  wallnng  cultivator  and  if  he  liked  it  well  enough  he  might 
buy  the  line  when  he  got  ready  to  trade  his  farm  for  a  stock  of  im- 
plements,  and,  wishing  to  place  him  under  obligations,  the  goods  were 
fwld  to  him  at  a  net  wholesale  price.  Again,  perhaps  the  deal  was  a 
highly  competitive  one,  and  if  you  had  not  made  it  some  one  else 

You  will  say  the  picture  is  overdrawn,  but  it  is  not.  Correspond- 
isnce  is  on  file  in  the  office  of  the  secretary  of  any  dealers'  association 
to  warrant  every  statement  made.  I  know  cases,  gentlemen,  where 
it^hipments  of  a  neighborhood's  requirements  have  been  made  to  one 
man  and  when  dealers  have  called  attention  to  it  the  defense  has  been 
set  up  that  the  customer  carried  a  stock  and  had  a  place  of  business 
and  a  good  warehouse.  Every  word  of  this  was  true  m  a  sense,  but 
it  developed  that  the  stock  consisted  of  implement  in  use  on  the 
farm,  the  place  of  business  was  the  farm  yard,  and  the  warehouse 
was  the  implement  shed.  The  shipments  had  been  taken  from  the 
depot  by  the  parties  for  whom  they  were  ordered.  . 

You  have  no  conception  of  the  way  retailers  are  annoyed.  It  is 
part  of  my  mission  here  today  to  inform  you,  and  the  best  way  to  do 
Siis  is  to  outline  specific  cases  which  have  come  to  the  attention  of 

your  associations.  ,   ,  ,  i.  •  u  i.    i 

I  was  privileged  last  spring  to  read  the  correspondence  which  took 
place  between  a  manufacturer's  distributing  house  manager  and  a 
Sealer  in  regard  to  a  buggy  shipment.  Several  Jf.^^f,  ^«f  ,?^^- 
changed,  and  finally  the  manager  dismissed  the  subject  by  stating 
that  the  job  had  been  on  the  floor  until  it  tired  the  ey^  looking  at  it 
mnd  he  was  glad  to  dispose  of  it  at  any  price.  The^acts  were,  the 
buffgy  was  in  possession  of  the  dealer  when  he  filed  the  complaint 
Wiethe  branch  house  manager,  he  having  taken  it  in  on  a  trade  for 
an  automobile,  and  it  was  one  of  the  factory's  1914  models  and  had 
never  been  taken  out  of  the  crate  after  leaving  the  factory.  Now  the 
president  of  the  factory  that  made  that  )ob  would  not  sanction  such 
business  methods  for  a  minute,  but  he  does  not  keep  close  enough 
tab  on  his  manager  who  believes  that  his  job  depends  on  the  volume 
of  sales. 

eOME  CASES  IN  POINT. 

Let  me  tell  you  something  that  occurred  a  short  time  ago.  A 
dealer,  who  complained  of  a  direct  shipment  to  the  user  of  an  im- 
plement, was  told  that  the  shipper's  system  of  good  service  compelled 
shipment  first  and  investigation  afterwards.  A  further  explanation 
was  made  to  the  effect  that  when  orders  are  received  from  grain  deal- 
ers, blacksmiths,  general  store  merchants,  and  others  with  a  credit 
rating,  they  are  referred  to  the  credit  department  and  if  O.  K  d. 
the  shipments  are  hurried  out;  and  if  upon  later  investigation  it  is 
found  that  the  party  is  not  a  dealer  m  implements  they  adjust  it 
with  some  dealer.  In  other  words,  if  no  dealer  objects  to  this  lack 
of  protection  nothing  is  done,  but  if  a  vigorous  protest  is  entered 

the  investigation  commences.  .„  .„     .    ^      tv:      i.    v.- 

Here  is  another  circumstance  which  will  illustrate:  Direct  ship- 
ment of  a  vehicle  was  made  to  a  small  town.  A  branch  house  man- 
ager admitted  making  it  and  said  that  he  had  shipped  the  same 


EXHIBITS. 


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party  three  or  four  j'obs  and  knew  that  he  had  sold  them  to  his  neigh- 
bors, but  he  stated  that  if  the  dealers  there  were  not  wide  awake 
enough  to  see  the  advantage  of  selling  his  buggies  he  saw  no  reason 
why  he  siiould  be  shut  out  of  that  trade.  In  some  unaccountable  way 
the  correspondence  fell  into  the  hands  of  the  general  manager  at  the 
home  office.  He  wrote  the  secretary  of  the  association  for  full  par- 
ticulars. Result — the  branch  house  manager  was  seeking  a  new  job. 
Here  is  what  the  general  manager  wrote  the  secretary:  "In  two 
weeks  we  will  have  our  annual  round  up  to  our  travelers,  and  I  can 
assure  you  that  none  of  them  will  go  away  from  here  without  having 
acquired  some  knowledge  as  to  whom  we  can  sell  and  to  whom  we 
cannot  sell,  and  there  will  be  a  severe  penalty  added  for  violation  of 
our  instructions."    Such  a  letter  sounds  good  to  the  dealer. 

If  you  want  to  help  the  retail  dealer  you  can  remove  the  greatest 
obstacle  to  his  success  if  you  will  instruct  your  sales  managers, 
branch  house  managers  and  travelers  that  vou  will  not  countenance 
direct  sales  or  sample  shipments.  Not  only  instruct  them  of  your 
policy,  but  see  that  your  instructions  are  complied  with. 

We  do  not  consider  that  we  have  received  the  proper  degree  of  pro- 
tection when  the  manufacturer  simply  protects  his  agent  to  the  extent 
of  declining  retail  business  in  said  agents'  particular  territory.  Our 
interests  as  a  class  should-  be  considered.  We  feel  that  the  con- 
sumers' trade  is  ours.  If  every  manufacturer  were  to  insist  upon  the 
privilege  of  selling  direct  to  users  where  he  has  no  contract  agent, 
what  would  become  of  our  calling?  Through  the  dealer  is  your 
most  economical  channel  of  distribution,  and  he  will  continue  to  be 
just  as  long  as  you  assist  in  making  his  business  profitable.  He  needs 
every  encouragement  you  can  give  him.  When  you  interfere  with 
his  business  by  making  an  occasional  direct  sale  you  simply  contribute 
toward  his  downfall.  He  forgets  all  about  the  cost  of  doing  busi- 
ness and  offers  his  stock  at  any  sacrifice,  because  he  is  discouraged. 

As  stated  by  a  prominent  writer  upon  this  subject,  it  is  simply  a 
case  of  making  a  choice  arid  abiding  by  it.  If  the  manufacturer 
wishes  to  choose  the  consumers'  trade  and  become  a  dealer  as  well 
as  a  manufacturer,  let  him  do  it.  There  is  nothing  dishonorable  in 
such  an  act.  But  if  he  chooses  the  dealers'  trade,  let  him  remember 
it  is  the  business  of  the  class  that  he  seeks,  hence  it  is  the  interest 
of  the  class  that  he  must  protect.  Any  other  policy  carried  to  its 
logical  conclusion  means  the  absolute  destruction  of  the  retail  system. 

A  manufacturer  in  his  eagerness  for  representation  in  a  town 
where  he  has  never  been  able  to  get  a  foothold,  made  a  sale  direct 
to  user  and  set  up  the  claim,  "  We  make  a  good  line  of  goods  and  are 
entitled  to  representation  at  every  good  town."  It  is  unfair  to  take 
this  position.  There  are  not  enough  dealers  in  even  the  most  pros- 
perous towns  to  represent  all  of  the  good  lines  of  implements  manu- 
factured, and  the  manufacturer  who  assumes  that  he  is  entitled  to 
representation,  even  though  the  field  is  covered,  and  sets  about  getting 
it  with  utter  disregard  of  good  trade  ethics  is  inflicting  injury  upon 
the  retail  trade  that  is  hard  to  overcome. 

The  claim  is  made  by  some  that  there  are  certain  new  goods  in 
the  implement  line  in  which  dealers  will  not  become  interested  and 
that  you  must  demonstrate  their  usefulness  by  selling  direct  to  users. 
It  is  possible  that  there  may  be  some  such  goods,  but  there  is  abso- 
lutely no  excuse  for  selling  such  articles  at  a  wholesale  price.    The 


/ 


FABM-MAOHINBBY  ttLMSM  ABSOCUTIOim. 

price  set  on  such  goods  should  be  a  retail  price  which  contemplates 
the  average  cost  of  conducting  the  retail  business.  Then  when  the 
demand  is  established  the  dealei-s  can  take  hold  of  the  goods  and  ^11 
at  a  price  which  affords  a  legitimate  profit  and  remunerates  them  for 
service  rendered. 

Now,  right  in  this  connection  let  me  ask,  "  When  making  such  a 
sale  would  it  not  be  better  to  deliver  the  article  through  some  regu- 
larly established  dealer  who  will  receive  it,  set  it  up  properly  and 
render  other  service  to  you  and  to  the  customer? "  For  this  service 
you  can  afford  to  pay  a  commission.  By  pursuing  such  a  course  you 
have  made  a  friend  of  the  dealer,  convinced  him  of  the  merit  and  of 
demand  for  the  article  and  paved  the  way  for  future  business.  You 
gain  a  worker  for  your  goods,  instead  of  a  knocker.  Dealers  would 
prefer  to  have  you  make  your  deliveries  of  direct  sales  through  their 
houses,  rather  than  to  ship  direct  to  their  customers  even  though 
there  were  not  one  cent  of  profit  in  the  transaction  for  them.  In 
making  this  statement,  I  am  simply  voicing  the  sentiment  expressed 
in  our  conventions  time  and  again. 

There  are  some  goods  which  the  average  dealer  cannot  afford  to 
stock,  but  he  is  dihgent  in  looking  after  prospective  buyers  for  the 
same,  and  reports  them  to  the  manufacturer  who  sends  special  sales- 
men to  close  the  sale.  On  this  kind  of  business  the  dealer  is  entitled 
to  a  fair  compensation,  but  too  often  the  sale  is  made  at  a  price  which 
shuts  the  dealer  out  entirely,  and  he  is  told  that  it  was  a  highly  com- 
petitive deal  and  sale  had  to  be  made  at  a  net  wholesale  price  or  not 
at  all.  Why  is  it  that  your  special  salesmen  who  handle  this  class 
of  business  are  so  free  with  the  knife  until  they  have  eliminated  the 
dealers'  profits  entirely  ?  Why  is  it  that  the  limit  is  established  at  a 
net  wholesale  price  to  dealers?  Why  not  make  the  arbitrary  price 
at  a  figure  which  would  afford  the  dealer  some  profit  so  he  will  be 
encouraged  to  continue  his  efforts?  The  dealer  does  not  relish  being 
told  that  the  deal  was  a  highly  competitive  one,  hence  it  was  neces- 
sary in  order  to  save  it  to  give  his  profit  away.  These  cases  are  not 
rare  by  any  means;  they  are  of  everyday  occurrence.  If  you  were  a 
retail  dealer  and  had  worked  diligently  to  close  a  sale  and  had 
received  this  kind  of  treatment,  what  would  you  do  I 

THE  TRADE  PRESS. 

I  am  not  unmindful  of  the  good  work  for  our  cause  which  has 
been  done  by  the  trade  press.  It  has  labored  constantly  for  the 
upbuilding  of  our  business.  To  these  friends  we  are  indebted  in  a 
large  ineasure  for  what  improvement  has  been  made  in  conditions. 

If  I  have  been  able  to  throw  any  light  upon  any  of  the  subjects 
I  have  mentioned  I  trust  you  will  give  them  some  thought.  What 
I  have  said  comes  from  my  intense  interest  in  this  work.  We  are,  all 
of  us,  every  year,  coming  to  a  fuller  realization  of  our  dependency 
upon  one  another  and  have  learned  that  only  by  honest  co-operation 
of  all  branches  can  real  progress  be  made. 

In  conclusion,  there  is  one  thing  in  which  we  are  more  or  less  prone 
to  err,  that  is  in  harping  continually  upon  the  evils  of  our  business, 
instead  of  holding  up  to  view  its  brighter  side,  but  I  have  tried  to 
bring  some  of  our  problems  to  your  attention  in  such  a  light  that  some 
good  may  result    We  can  not  hope  to  remedy  these  difficulties  which 


BXHisnB. 


349 


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lie  in  our  pathway  to  success  without  calling  attention  to  them,  and 
for  this  privilege  of  presenting  to  you  some  of  the  great  problems 
which  are  ever  present  in  the  retail  business,  I  wish  on  behalf  of  the 
constituency,  which  I  represent,  to  thank  you. 

Exhibit  32. 

resolutions    adopted    by    the    national    implement    & 
vehicle  association  at  the  annual  convention  held 

OCTOBEB  21,  22,  AND  23,  1914.^ 

Your  committee  on  resolutions  begs  leave  unanimously  to  report 
as  follows: 

STIMULATION  OF  DOMESTIC  TRADE. 

Whereas,  The  National  Implement  and  Vehicle  Association, 
through  its  members  and  representatives,  has  such  relations  with 
agricultural  affairs  in  America  as  to  afford  it  a  clear  and  accurate 
knowledge  of  general  business  conditions  in  the  agricultural  field; 

and 

Whereas,  We  believe  that  the  agricultural  communities  of  America 
and  the  bankers  who  serve  them  were  never  in  a  more  secure  posi- 
tion than  today,  nor  one  that  promised  more  if  present  opportunities 
were  embraced; 

Whereas,  Because  of  the  great  European  war  now  in  progress,  it 
became  necessary  to  take  certain  protective  steps  to  insure  this  coun- 
try against  some  of  the  evil  financial  effects  threatened  by  such  war, 
which  steps,  so  taken,  have  operated  as  a  partial  financial  suffocation 
in  this  country;  and 

Whereas,  We  believe  that  the  present  need  of  the  country  is  to 
restore  confidence  at  home  and  put  the  nation's  unemployed  back  on 
the  pay  roll;  and  believing  the  American  banker,  as  the  advisor  of 
commerce  and  the  counsellor  of  rural  communities,  holds  the  key  to 
the  situation ;  and  believing  he  can  lead  the  way  to  a  resumption  of 
industry  through  bringing  home  to  the  American  farmer  the  re- 
sponsibility imposed  upon  him  to  help  feed  the  nations  of  Europe 
and  that  by  so  doing,  and  by  recognizing  his  own  opportunities  and 
obligations  in  the  matter,  he  may  set  the  wheels  of  industry  and 
commerce  in  motion,  to  establish  credit  confidence  and  beget  courage ; 
now,  therefore,  be  it 

Resolved,  That  we  earnestly  make  the  following  recommendations : 

(1)  Urge  the  farmer  who  has  harvested  his  grain  not  to  speculate 
on  the  fluctuation  of  future  prices. 

(2)  Kecommend  to  the  farmer  of  the  south  to  diversify  his  crops. 
Experience  has  shown  that  a  one  crop  country  cannot  continue  to 
bring  prosperity  to  its  farmers.  The  great  wheat  states  of  the 
Dakotas  are  diversifying.    Our  cotton  states  should  do  likewise. 

(3)  Preach  preparedness  for  the  1915  harvest.  Care  in  seed  selec- 
tion, proper  tillage  and  cultivation  will  bring  increased  crops  to 
meet  the  increased  demands.  More  intensive  cultivation  quite  as 
much  as  increased  acreage  will  bring  prosperity  to  the  farmers. 

(4)  Increase  the  number  of  farms  raising  stock  and  thereby  se- 
cure a  natural  fertilizer  for  the  soil.  Cattle,  hogs  and  poultry  mean 
ready  money  and  bank  accounts. 

»Ai  reported  In  the  Farm  Implement  News.  October  22,  1914,  pp.  33-34. 


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FABM-MACHINEBY  TRADE   ASSOCIATIONS. 

(5)  Secure  for  the  agricultural  community  the  benefits  provided 
in  the  new  currency  law  by  creating  a  demand  for  the  early  opening 
of  the  various  federal  reserve  banks. 

(6)  Discourage  all  speculation,  but  encourage  the  expansion  of 
legitimate  business  in  the  rural  communities  by  reasonable  extension 

of  credit.  .     x-     n  j 

In  this  connection  we  reiterate  that,  we  enthusiastically  endorse 
the  effective  efforts  of  the  secretary  of  the  United  States'  Department 
of  Agriculture  and  the  various  state  agricultural  departments  to- 
wards promoting  the  welfare  of  our  agricultural  interests  by  ac- 
?uainting  the  farmers  with  the  most  practicable  methods  of  intensive 
arming,  and  by  various  means  stimulating  a  beneficial  rivalry  in 
crop  production  as  well  as  in  many  other  ways. 

STANDARDIZATION   OF  PRODUCTS  AND  EQUIPMENT. 

Whereas,  The  multiplicity  of  variety  and  styles  renders  the  manu- 
facturing economy  difficult,  and  believing  that  both  we  and  our 
customers  are  jointly  responsible  for  this  excess,  and 

Whereas,  At  a  recent  conference  with  the  representatives  of  the 
dealers  in  our  lines  we  found  a  strong  co-operative  spirit  to  exist, 

Resolved,  That  those  manufacturing  the  various  lines  represented 
by  this  association  immediately  investigate  conditions  regarding 
this  multiplicity  of  sizes  and  styles  and  immediately  begin  a  prac- 
tical effort  to  ascertain  how  far  variety  may  be  reduced  to  the  benefit 
of  manufacturer,  dealer  and  consumer,  yet  not  interfere  with  fur- 
nishing the  best  practical  equipment. 

CX)8T   EDUCATION    AND   DEALERS'   LOCAL   CLUBS. 

Whereas,  Our  executive  board  in  reviewing  the  work  of  cost  edu- 
cation and  dealers'  local  clubs  has  heartily  endorsed  its  continuance 
and  renewed  our  pledge  of  financial  support,  therefore  be  it 

Resolved,  That  we  approve  the  action  of  our  executive  board  and 
pledge  our  moral  and  financial  support  to  a  greater  degree  than 
everbefore  in  the  work  to  be  undertaken  for  the  ensuing  year.  We 
also  strongly  urge  the  active  and  practical  co-operation  of  the  sales 
forces  of  our  members  who  occupy  a  peculiarly  advantageous  posi- 
tion in  their  relations  with  the  dealers  and  can  render  effective  serv- 
ice in  this  imdertaking. 

UNIFORM  PROPERTY  STATEMENT. 

Whereas,  Kealizing  the  difficulties  in  obtaining  authentic  credit 
information  relative  to  a  customer's  standing,  and  believmg  that  he 
himself  can  best  render  this  information,      ^    ^      .  ,.^         _ 

Resolved,  That  we  heartily  endorse  the  efforts  of  our  credits  and 
collections  committee  in  the  preparation  of  a  uniform  property  state- 
ment whereby  it  will  be  possible  for  the  dealer  to  render  his  creditor 
desirable  information  concerning  his  standing  accurately  and  with- 
out unusual  demand  upon  his  time.  We  believe  also  that  the  use 
of  such  statement  will  acquaint  him  more  frequently  with  his  own 
condition  and  thereby  prove  a  mutual  benefit.  We  recommend  that 
when  the  form  under  consideration  has  been  approved  by  the  credits 
and  collections  committee  and  our  executive  board,  that  all  members 
make  use  of  it  at  the  earliest  date  possible  thereafter. 


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EXHIBITS. 


LEGISLATION. 


351 


Resolved,  That  this  association,  through  its  several  committees, 
and  as  a  matter  of  practical  importance,  continue  the  policy,  as  the 
necessity  arises,  of  appearing  personally,  either  before  Congress  or 
the  various  state  legislatures,  as  the  case  may  be,  and  expressing 
properly  its  attitude  regarding  legislation  that  may  be  pending,  that 
seriously  affects  the  interests  of  its  membership. 

TRADE  COMMISSION   ACT. 

Resolved,  That  we  heartily  endorse  the  general  character  of  the 
law  recently  enacted  by  Congress,  creating  the  Federal  Trade  Com- 
mission, and  charging  it  with  the  general  supervision  of  all  inter- 
state and  foreign  commerce,  except  banks  and  common  carriers. 

CLAYTON    ACT. 

Resolved,  That  we  are  unalterably  opposed  to  the  unfair  provisions 
of  the  Clayton  act,  which  exempts  certain  elements  of  the  country's 
business  and  commercial  life  from  all  criminal  liability  under  the 
federal  anti-trust  laws,  in  addition  to  promoting  industrial  strife 
by  legalizing  such  reprehensible  acts  as  picketing  and  boycotting. 

MISCELLANEOUS. 

Resolved,  That  we  extend  thanks  and  appreciation  to  the  retiring 
officers  and  members  of  committees  for  the  substantial  results  se- 
cured, and  for  their  liberal  donation  of  time  and  thought  to  asso- 
ciation problems. 

Resolved,  That  we  extend  to  the  management  of  the  Congress 
hotel  and  Annex  our  appreciation  of  their  efforts  to  make  the  con- 
vention a  success,  and  for  the  careful  consideration  shown  our 
members  and  their  guests. 

Resolved,  That  we  extend  to  the  trade  press  our  sincere  thanks 
for  their  cordial  co-operation  during  the  past  year,  and  in  connec- 
tion with  the  reporting  of  our  convention. 

Resolved,  That  the  Auxiliary  of  our  associate  members  be  ap- 
prised of  our  hearty  thanks  lor  their  very  generous  and  liberal 
entertainment. 

Resolved,  That  the  speakers  who  have  contributed  so  much  to 
the  success  of  our  convention  during  the  business  session  and  banquet, 
be  informed  of  our  deep  appreciation  and  gratitude. 

Resolved,  That  we  desire  to  express  our  appreciation  of  the  ad- 
dress of  H.  J.  Hodge,  secretary  of  the  National  Federation  of  Imple- 
ment and  Vehicle  Dealers'  Associations,  and  thank  him  for  the  many 
valuable  suggestions  he  gave  us. 

Recommendations  by  Resolutions  Committee. 

The  resolutions  committee  also  offered  the  following  recommenda- 
tions on  subjects  which,  in  the  opinion  of  the  committee,  should  be 
acted  upon  by  the  convention.  AH  of  these  recommendations  were 
approved  by  unanimous  vote : 


352 


TABM-MAOHimBT  TRADE  ASSOCIATIONS. 


t 

I 


OEAIiERS'  OPENINGS,  8PECIAI.  SALE  DAYS  AND  DONATIONS. 

Whereas,  Commendable  progress  has  been  made  in  eliminating 
dealers'  openings,  special  sales  days,  auction  sales  and  donations, 
which  were  declared  matters  of  unwarranted  expense,  both  by  our 
sales  managers'  department  and  dealers'  associations,  and 

Whereas,  Completing  this  effort  will  depend  on  the  continuation 
of  the  same  educational  methods  which  have  thus  far  proved  so 
successful,  therefore  be  it 

Resolved^  That  we  re-affirm  our  opposition  to  these  forms  of 
expense  and  that  our  members  be  requested  to  inform  their  sales 
forces  with  instructions  that  these  wasteful  items  of  expense  be 
discontinued ;  and  be  it  further 

Resolved^,  That  to  the  end  that  we  may  have  the  co-operation  of 
our  dealer  customers,  our  secretary  be  requested  to  mail  a  copy  of 
this  resolution  to  the  secretaries  of  the  several  retail  dealers'  asso- 
ciations, thanking  them  for  their  past  efforts  and  soliciting  a  con- 
tinuance of  their  endeavors  in  this  movement. 

ATTENDANCE    AT   SALES    MANAGERS'    MEETINGS. 

Whereas,  The  Sales  Managers'  Department  is  thoroughly  investi- 

fating  all  problems  which  affect  the  marketing  of  our  product  and 
ave  applied  timely  suggestions  and  suitable  remedies  as  well  as 
having  had  such  a  beneficial  effect  upon  our  mutual  relationship  with 
ihe  retail  trade,  and 

Whereas,  Questions  involving  many  economies,  trade  difficulties 
and  better  business  methods  are  of  the  utmost  importance  to  all  of 
us,  therefore  be  it 

Resolved,  That  all  active  memberships  of  our  association  see  to  it 
that  they  have  a  representative  in  attendance  at  each  of  the  five  meet- 
ings held  annually  and  co-operate  in  this  valuable  work. 

GAB   STOPPING   PRIVILEGE. 

Whereas,  It  is  understood  that  the  railroad  companies  are  about 
to  discontinue  the  practice  of  stopping  cars  in  transit  to  finish  load- 
ingand  to  partly  unload,  and 

Whereas,  We  believe  such  a  move  will  be  seriously  detrimental  to 
the  interests  of  the  shippers  and  general  public,  therefore  be  it 

Resolved,  That  we  earnestly  object  to  this  movement,  and  hereby 
urgently  request  the  railroad  companies  to  continue  the  said  prac- 
tice heretofore  existing  to  the  great  advantage  of  all  concerned. 

STATE  LEGISLATIOK. 

While  opposed  to  professional  lobbjnng,  the  association  earnestly 
urges  the  membership  in  the  different  states  to  assist  the  state  com- 
mitteemen of  the  state  legislation  committee  in  each  state  by  present- 
ing objections  or  making  suggestions  to  the  various  committees  to 
whom  bills  are  referred,  in  a  dignified  and  honorable  way,  either  by 
personal  representation,  or  by  letter,  or  both  endorsed  by  our 
members. 


) 


INDEX. 


Pi«e. 
Aooid«Dt  prevention 106 

Aooounting.    See  Cost  accounting. 

Advertising,  expenditures  of  large  companies .       84 

ibnn*paper 203-206 

legislation  against  misrepresentation  In. .  202-203 
local4iew8paper,  conference  of  dealers  and 

manufacturers  as  to  advantages  of 205 

See  also  Mail-order  advertising. 
Agreements  among   dealers  («ee  aUo  Price 

agreements  among  dealers) 130, 

160, 185, 187, 191, 193, 194, 195, 208, 210, 238 
Agricultural  Publishers'  Association,  attitude 

toward  mail-<»'der  advertising 206 

Alberta, Province  of, legislation 86,87 

A  merlcan  Association  of  Public  Accountants .       97 

American  League  of  Associations 200, 201, 202 

American  Plow  Co.... • • 19 

American  Seeding  Machine  Co 20 

Anti-Middleman  Association 170 

Antitrust  laws,  allied  violation  by  Indiana 

Manufacturing  Co 123, 123n,  124n 

effect  on  association  activities 32,34,35,200 

efforts  to  secure  amendment  to 192,200 

Arbitration  committee,  joint,  of  dealers  and 

manufacturers 136,139,140,154 

Arbitration  oonunittees,  joint,  of  dealers  and 

jobbere 150,161,195 

Arbitrationoommitteesof  dealers'associations. 

Su  Grievance  committees. 
Arkansas,  suit  of  National  Implement  and 

Vehicle  Association  to  test  tax  law  of. .       96 
Articles  of  association  of  dealers'  associations.        5 

amendments 141,142,168-163,172,187 

direct-sale  provisions 187 

prloe^igreement  provisions 243 

uniform,  recommended  by  National  Feder- 
ation of  Implement  and  Vehicle  Deal- 
ers'Associations 186,187 

Associations,  causes  of  fOTmatian 11,22,129 

cost-accounting  activities 55 

ooets,  efforts  to  reduce 13,57-88 

dealers'.    See  Dealers'  associations. 

development f-11 

early  activities 11-20 

executive  sessions 161 

farm-wagon  manufacturers.  See  National 
Wagon  Manufacturers' Association;  Na- 
tional Implement  and  Vehicle  Associa- 
tion, trade  departments. 

Government  investigation 163-172 

infcvmation  disseminated  by 185,193 

legislative  activity  of  manufacturers' 8^110 

loyalty  of  members 12 

membership,  eligibility 6 

merger  of  minufaoturers' • 3 

68248*»— 16 ^2S 


Page. 

Associations,  methods  of  adjusting  dealers' 

complaints . .  160, 161, 162, 163, 172-175, 182-183 
methods  used  with  manufocturers  unwill- 
ing to  adjust  complaints  amicably. . .  185-193 
plow  manufacturers.  See  Northwestern 
Plow  Association;  Northwestern  Plow 
and  Cultivator  Association;  National 
Plow  Association;  National  Imple> 
ment  and  Vehicle  Association,  trade 
departments. 

producers  of  wagon  stock 59,60,61 

seeding-machinery  manufacturers.  See 
National  Association  of  Grain  Drill 
Manufacturers;  National  Implement 
and  Vehicle  Association,  trade  depart- 
ments. 

policy 170 

price  activities 11-20,21,207-243 

secrecy  in  recording  transactions 33 

thresher    manu&u;turers.      Su    National 

Association  of  Thresher  Manufacturers. 

violations  of  rules  by  members  (tee  also 

Penalties) 12 

AttOTnejrs,  report  to  National  Implement  and 
Vehicle  Association  by  (teeaUo  Legal 

advice;  Litigation) 92,08 

Automobile  dealers,  membership  in  Western 
Retail  Implement,  Vehicle  and  Hard- 
ware Association 184 

Avery  Manu&ctunng  Co.,  allied  concessicms 

by  Indiana  Manufacturing  Co.  to 124 

Bain  Wagon  Co .••••••       29 

Bankruptcy  act  of  1898 79 

Banner  Buggy  Co 167 

Bent  rims,  cooperation  among  wagon  manu- 
facturers to  produce  supply 65 

Bent-wood  stock,  unsatis&ctory  conditions  in 

securing 69 

Bills  of  ladhig,  railroad,  efforts  of  associations 

to  secure  improvement 69 

Binder  twine,  cooperation  among  early  manu- 
facturers          8 

prison-factory  manufacture 107-109 

railroad  classification,  proposed  changes...  72,73 
Black  list  (tee  aiso  Boycott;  Information) ....     157 

Bois  d'arc  felloes,  cost  to  manufacturers 65 

Bolsters,  farm-wagon,  standard  heights  for . . .       60 

Boxes  for  farm  wagons,  advance  in  price 27, 

30,33,34 

shop  costs 30 

uniform  prloe  list 23 

Boycott,  acts  ci  Iowa  Implement  Dealers' 

Association  held  to  constitute 158 

attitude  of  dealers'  associations 165, 182 

See  alto  labatDAtiaa. 

353 


ill 


INDEX. 


Brakes,  wagon,  minimiim  pfiecB 29 

Bnoeh  retail  stores  of  manufactorers,  deal- 
era*  resolutions  on 139,140,141,142,143 

deateis*  and  manufacturers'  conference  on. .     141 

dealeis'  opposition 138-143 

effect  upon  trada  of  regular  dealers 141 

Iowa  dealers'  attitude  toward 188, 140, 143 

National  Federation  of  Implement  and  Ve- 
hicle Dealere'  Associations,  statement 

by  secretary  regarding 1^ 

spreadof  ^ 


Commercial  law ^ 

Commercial  News,  The,  publication  of  names 

of  direct-selling  manufacturers W8 

Commi^ion-agency  contracts,  dealerV  ofppoffl- 

tionto 7,129,136,137 

National  Wagon  Manufacturers'  Associa- 
tion, attitude  toward 85,80 

plow  companies' ••••••••••• ^^ 

retail  prices  fixed  in •••.••••••.•  20*^,208 

thresher  manufacturers' •••••••.. .     1*6 

Commissions  en  irregular  sales 132 


Buchanan,  James,  inventor  of  wmd  stacker.,     ill 


transfer  of  patent  lights  by 113 

BuUetin,  Implement  Deatera*.    Ste  Imple- 
ment Dealers'  Bulletin. 
Bulletins  of  National  Implement  and  Vehicle 

Associaticm 69,82,83 

Buyeisofwagon  stock,  conferences..,.  60,61,62,66 

eflort  to  regulate  competition  among 61 

Sm  alio  Pnrchasing  agents. 
By4aws  of  associations.    <Sm  AztideB  of  asso- 

dation. 


136n 
86 


Canada,  reciprocity  with W,100 

Canadian  manufacturers  in  United  States 

mazket "^ 

CuanaKO,  wed  in  connecttoii  with  com- 

misBlon  contracts. 13** 

deals' associations  oppose 7,15,16 

expense  of,  as  an  item  hi  cost  oS  distribution      86 

CazriaiEe  Builders'  National  Association 134, 

^  194,22Qn 

Caniage  ManolBctnrers' Assodaticn 22Cta 

Carrying  clause  in  dealers*  contracts 

••  Carrying  over"  goods 

Case,  J.  I.,  Threshing  Machine  Co.,  Indiana 

ManulSacturing  Co.,  controversy  with.  114-119, 
130,121,122,123,124,126,127 

Uoensaoontraetwlth 114-115 

profits  in  manutftcture  of  wind  stacker 112n 

shopright  in  Nortwi  patents 117,121,123 

Catalogue    agents,    opposition    of    dealers' 

ggiyy»i^fiQH» 175 

CUakgoe^ioase  committee,  JoiDt 194,196 

Cktalogoe  houses.    See   Direct    sales;    Mailr 

order  bouses. 
Chamber  of  Commerce  of  tha  United  States  of 

America. 91,92 

Chattanooga  Wagon  Co. 29 

Chautauqua  hom^-trade  talks 206 

fqiiMffti^atton  of  dealers  by  commercial  agen- 
cies  133,134,135 

Clawifications,  standard,  for  plows 41 

CoercioD,  prohibited  by  articles  ol  association 

of  dealers' associations 187,287 

"Co-eixpense" ^ 

Collections.    See  Credits  and  collections. 
Colorado  Retail  Hardware  and  Implement 

Association. 

local  clubs  in  territory  of 

Combination  to  fix  uniform  selling  prkw  lor 

wind  stacker,  alleged 123-ia4n 

Combinations  among  manufacturers  o(  grain 

binders. ^»^ 

Commeroial  agendfs,  olassiflcation  of  imple- 

mtnt  dealers  bj. ^ 


meet  and  Vehicle  Association 15«n,  90 

Common  parts,  association  efforts  to  stand- 
ardize i»e(  aUto  Repair  parts) W,W 

Competition,  direct-selling  concerns. •,» 

irregular  dealers tt,128 

twice  catting  among   dealers,  prevention 

of 207-243 

regulation  of, by  associations.  176,176,177,187,237 

suppression. ^** 

Competitors,  efforts  to  limit  number  of 12, 175 

Complaints  by  dealers 4,129,131,132 

adjustment 133. 150-152, 172, 178, 174, 175 

disposition  of,  by  dealers'  associations 130, 

148,149,150,172,173,185 

importance  in  work  of  associations 163, 

164,165,166,167 

methods  of  handlfag 5,6, 137, 147-154, 

160, 161, 162, 163, 166, 167, 172-175. 185-198 
National  Association  ol  Agricultural  Imple- 
ment and  Vehicle  Manufacturers,  atti- 
tude toward 138,134,1S7 

National   Federation   ol  Implement  and 
Vehicle  Dealers'  Associations,  attitude 

toward 168,169,163,164 

windmill  and  pump  manufacturers 188 

Concessions,  price.    S«  Price  concessions, 
Conferoices,   between   manufacturers'    and 

dealers' (Hganitations 136-138, 

144,146,166,169 

between  manufactorers  nd  Jobbers.  —  30, 43, 44 

See  aleo  Cooperation. 
Consignment    contract.     See    Commission- 
agency  contracts. 
Consolidation,  proposed  among  plow  mann- 


11 


facturws 


10 


among  wagon  companies !• 

Constitutions  of  associations.    See  Articles  of 

association. 
Consular  service,  interest  of  manufacturers  fa  98, 101 
Contracts,  license,  of  Indiana  Manufacturing 

Ca    Se*  Wind-stacker  patents-license 

system- 
manufacturers',  with  jobbers.. 2" 

sale,  between  manufacturers  and  dealers. . .        7 

uniform  drafted * 

titleclause  in "*' 

wind-stacker  patents-license.    See  Wind- 
stacker  patents-license  system. 
Convfct  labor.   Su   Prison-factory    legisto* 

tion. 
Cooperation,  cost  educational  movement ....     224 

credits ^6-78 

dealers'  associations  in  other  trades . .  192, 199, 200 

dealors  and  implement-trade  papers 208 

and  jobbers 90,134,160-162,162,196 


>       f 


\ 


'     I     p.. 


f       l|      M^ 


-         - 


V 


INDEX. 


355 


CooperatiOB,  deakn  and  mannfMtarers.  2,86,139, 
133-147, 153, 164, 169, 170, 171, 172, 194, 226, 227 

legislation 93 

National   Federation  of  Implement  and 
Vehicle  Dealers'  Associations  and  o<Hi^ 

stituent  associations UB 

Cooperative  baying,  dealers 86 

manu&cturing  companies 58,60 

Cooperative  stores  of  farmers,  policy  of 
National  Federation  of  Ratail  Imple- 
moit  and  Vehicle  Dealers'  Associa- 
tions toward  178,181 

negotiations  by  dealers'  associations  with 

manufacturers  relative  to 175-182 

number 181 

opposition,  by  implement-trade  papers ....    179, 

181,193 
by  Iowa  Implement  Dealers'  Associa- 
tion   154-158 

by  Virginia-Carolina  Retail  Implement, 
Machinery  and  Vehicle  Dealers'  Asso- 

cktkm 178,179 

reasons  for 156 

sale  of  implements  by 178,181,182 

Cwn  planters,  cooperation  among  manufac- 
turers of 8 

prices.  Northwestern  Plow  and  Cultivator 

Association  recommends  advance 19 

Corporation  laws,  expense  to  manufacturers..  92,93 

Corporation  tax  law.  Federal 51,96-97 

Corporatk>ns,  State  taxation  of  foreign —  92, 98-96 
Cost  accountants  employed  to  collate  farm- 
wagon  costs,  report  of. 51,52 

Cost  accounting,  activities   of   associations 

fa  Implement  trade 27,37,45,63,55 

bureau  i»-oposed  by  National  Implement 

and  Vehicle  Association 53,226,227 

faterestasanitemin. 45 

resolutions  of  National  Federation  of  Imple- 
ment and  V  ehicle  Dealers'  Associations .     227 

standard  specifications 51 

uniform,  origfa  of  movement  for 218, 219, 220 

uniform  selUng  prices,  relation  to. . .  46-56, 241-243 
uniform  system  of,  recommended  by  Na- 
tJona  Implement  and  Vehicle  Associa- 
tion  46,47,61,53 

See  also  Cost    Educational   Association; 
Cost  educational  movement. 

Cost  Educational  Association 178 

cooperation  of  dealers  to  promote  cost  edu- 
cational movement 230 

Cost  Suggestions  No.  2  issued  by 229 

dealers  and  manufacturers  divide  work  of. .     232 

formation 226,228 

items  included  fa  cost  suggestions  recom- 
mended by 241 

littfature  sent  out  by 231 

proposed  organizatio  1 221 

purpose i28 

relation  of  kical-clab  movemen*^  to 228 

work  of 230,231,232 

Cost  educational  movement 218-243 

association  activities  fa 4,208 

comment  by  dealers  on ...•••• 232 

cooperation  to  promote 83,230 


Cost  ednoational  movement,  cost  committees 

appofated  by  dealers'  associations 226 

discussed  by  dealers'  organizations 226 

functions  of  traveling  salesmen  fa 82, 

83, 219, 223, 224, 228, 233, 237 
importance  fa  improvfag  financial  condi- 
tion of  dealers 81-83 

mportance  to  wagon  trade 224,225 

local  clubs'  relation  to 11, 228, 233, 240, 241 

manufacturers'  efforts  to  promote —  221, 222, 223 
method     of     establishing     retail     prices 

through 226,234,241-243 

National  Implement  and  Vehicle  Associar 

tion,  faterest  fa 82,83,230,233,235,236 

National  Federation  of  Implement  and  Ve- 

hide  Dealers'  Associations  indorses . .  224, 240 

origfa 26,27,218 

price  advances,  relation  to -220 

price  regulation  fa 234,237 

purpose 81,82,241 

special  cost  committee,  report  on  —  220, 227, 228 
Cost  of  doing  busfaess,  discussed  by  dealers' 

associations 2S5 

items  facluded  fa 222 

movement  to  educate  dealers  fa 218, 219, 220 

reports  on 226 

See  also  Cost  educational  movement;  Cost 
Educational  Association. 

Cost  of  insurance,  efforts  to  reduce 74-75 

Cost  of  materials,  discussed  by  special  trade 
departments  of  National  Implem^it 

and  Vehicle  Association 65 

standard  specifications,  effect  on 61 

See  aJso  Materials. 

Cost  suggestions,  adoption. S4 

distribution  of 224 

retail  prices,  relation  to 51 ,  53, 54, 55, 241-243 

Cost  system.  National  Implement  and  Ve- 
hicle  Association's   recommendatimis 

on -  64,55 

National  Plow  Association's  recommend** 

tions  on 45 

Costs,  comparison  of,  as  a  basis  lor  selling 

prices 32,35,52,55 

temptation  to  price  agreements S5 

wagon  manufacturers'  activities 23,51,52 

Costs,  efforts  to  reduce 14,49,57-88 

elimination  of  sizes  to  reduce 52, 86 

ncreasefa 19,25,26,30,48,49 

reports  on 46,226 

sellmg,  efforts  to  determine  average 243 

shop  labor 27 

special  committee  on  iron  and  sted SO 

standardization  as  a  means  of  reducing —       86 

variations  fa 21,23,26,27,32,51,86 

wagon,  mcrease  during  1906 32 

wfadstacker 112n 

See  also  Distribution,  cost  of. 
Court  decisions,  precautions  taken  by  associ- 
ations because  of 158-163,189 

Cr«dit,  handbook  of  information. 76 

terms  of 27,235,236 

Credit  faformation,  bureau  of,  proposed  by 
National  Implement  and  Vehicle  Asso- 
ciation  78^77,78 


•^.-.... 


I 


356 


>    I    i 


IHDEX. 


pnptftd  by  lootl 


7S-7IIB 


Oradlt  Usti  «f 

dnla  «f  impltiiMat  d«len, 
Cradlt  nporting  agoney,  diacussed  by  Na^ 

tional  Plow  Assoclfttian W 

Cnditrkk8,cffort8ofiiiainilMtann  to  limit..  7<M1 

efforts  to  lmproT»d«]«nM 91-9S 

IntarwtofMBoebtions  In ^7 

Gndlts,   arrangements   between   mannfeMV 

tanrs  and  dealers f 

claasifioatkin  of  regalar  dealers  by  oommer^ 

dal  agcndes 135 

cooperation  in  judging W-W 

Natioiial  Aaoeiatioo  of  Agrionltural  Impl»» 
mint  and  Vehicle  Maiwihfiturers,  com- 

mittsaon ^ 

Natkinal  Association  of  Credit  If  on 7S 

plan  of  exchanging  Information T7 

Natiooal  Assodation  of  Thresher  ManolM)' 

tmers,  recommendations  on 81 

Natioiial  Implement  and  Vehicle  Aasoda- 
i^Mvt  of  committee  on  terms 

235,236 

taxation  of/inStaU  of  Arkansas 95 

thresher  trade 13,80-81 

nnltem  propeiiy  statements  recommended 

by  manufactoran 78 

Cradita  and  ooUeotions,  interest  of  aasocia- 

tioos  in 6,78,90 

Cottlvatiws,  recommendation  of  Northwestern 
and  Cultivator  Association  to  ad> 

prloesof !• 

1  equipment  <rf <8 

CydoooCo 1^* 


s,  ooopecatiye  buying  among 

difficulties  of  manufacturers  in  procuring 


dlreetorlesof 134,136 

dtotrict  associations 10,U 

extravagant  practices  as  fckctor  In  cost  of 

distribution 85,87,88 

iBixperience  of  implement 7 

loealdttbsof.   9m  Local  dubs  of  dealers. 

6,7 

misation  among  (•«  also  Dealen*  aa> 

Mciiiiioiis) 4 

pMfiBtioo  of  price  cutting  among  oompet- 

fgg 207-243 

lelatioas  with  manufacturers 6,7 

Dealen*  assoclaticHis,  cooperation  with  organ- 
ised manuftustoren 133-147,1» 

coat  of  doing  buainees  discussed  by 2U 

fliUlHiiHiait «(W1.131 

dktot  ite  fefifiihir  aales,  attitude  toward.      17, 

m,161.164,185,187,l88,ia 

dotiaB  Of  members 1*7 

exeoutiTe  sessions,  prooeedtaigs 148, 

149,161,173,174,185 

Miijht  transportation  charges 7»-74n 

fci»m>tto«  sapplied  by  seoretarlss 189-192 

naU-otder  hooaas,  opposition  to 198-206 

National  Association  of  AgriealtQral  Imple- 
nmt  and  Vehide  Manoiietarers,  falter* 

«tlil 134,138.137 

pMAfMklflgUationoppoeadby 199.200 

mMfliBBboaiit  meetings  of 197 

...  1»-I86 


Dealiia' aaaooiiitioBi,  nnltorm  artUn  ef  iiio- 

dation M7 

work 10,16,17 

9m  else  State  and  interstate  associations  ot 
dealers;  Local  dubs  of  dealers. 
Debtors,  mining,  tf  orts  of  National  Imple* 

ment  and  Vehicle  Association  to  locate  .  77, 78 

Deere,  John,  Wagon  Co 66n 

Department  of  Justice,  investigation  of  im- 
plement associatioDS 164-167, 172 

Departments  of  the  National  Implement  and 
Vehide  Association.  See  National  Im> 
plement  and  Vehide  Association,  trada 
departments. 
Dimensions,  standard,  for  materials.  9ii 
Specifications,  standard,  materials. 

Direct  salesw ' 

activities  of  Michigan  Retail  Implement  and 

Vehide  Dealers*  Association 180 

Tri-State  Implement  and  Vehide  Dealers' 

Assodation 153^ 

adjusting  complaints 147-185,187 

arrangements  to  supply  dealers  with  names 
of  manufacturers  maldng...  160,167,182,189, 

190,191,192,193 
at  poiata  where  manufocturers  have  no 

acants 131,143-146 

commisBions  on. 173,174,189 

competition  with  companies  making 81 

oonferenooa  between   manu^turers   and 

datlaraon. 144,146,169 

cooperation  between  Jobbera*  and  dealers' 

o^anisations  (m 150-153 

deatos'  aaaodaUons,  attitude  toward 17, 

131,161,164,185,189,191 
pledged  not  to  patronise  manufac- 

m*irfac 130,185 

dtaNminating  notice  of 160, 

166,167,182,189-193 

azecQtlye  aeaaiona  of  dealers'  aasodations 

discuss 174 

fcrmatiwi  of  asaoeiatinns  caused  by 129 

Government   investigation  of  association 

activities  regarding 168-172 

Imidement  Deelers' Bullethi  on 150 

Natinial  Asaodation  of  Agricultural  Imple- 
MBOt  and  Vehide  Manufacturers'  reao- 

Intlona  on 144,141 

National  Federation  of  Implement  and 
Vflbiole  Dealera'  Associations'  reedu> 

Hum  on 144,145 

leaults  of  efTorta  to  curtail 148,149 

aetttement  of  dealers' oomplahita  of 147-185 

threabermaDolactarers 7 

naeof  oniform  complaint  blanks  to  report..     IM 
See  also  Irregular  sales;  Mail-order  housaa. 
Direct  sailing.    9m  Direct  sales. 

Directories  of  regular  dealers 134,135,149 

Dtooounts,unllormt  ade 50 

Dtotrfbutlon,  cost  of 84-88,93,169,170,243 

mall^Nrder  houses,  advantages  daimed  by..     169 

naonllMturers' control  of  facilities  of • 

■atail system,  ooaq>ared  with  other  methods 

of 128,129,170,171 

eoqpense ^^ 

indoraement  by  National  Inclement  and 
Vehide  Association.. ...... •••••.•...  109,170 


1 


/. 


>€ 


INDEX. 


357 


%^\ 


Page. 
Distribution,  system  of,  in  implement  trade .     &-8 
threshing  machinery,  functions  of  retail 

dealer  hi 146-147 

wastes  of 88 

Donations,  demands  on  dealers  for 85 

Druggists'  association. 1^ 

Bastem  Dealer,  The 193 

Elward  patent  Su  Wind-stacker  patents- 
lic«>nse  system. 

Emerson  Manufacturing  Co.,  correspondence 
with  Iowa  Implement  Dealers'  Asso- 
ciation   155,156,157 

Empire  State  Implement  Men's  Club,  in- 
dorsement of  cost  educational  move- 
ment by 223 

Employers'  liability.  See  Industrial  indem- 
nity. 

Equipment,  differences  in. 14 

standard,  in  cost  sjrstem  of  National  Im- 
plement and  Vehicle  Association . . —       46 

grain-drill  manufacturers  discuss 47 

plow  manufacturers  adopt 41 ,  47, 48 

wagon  manufacturers  adopt 36 

Executive  sessions,  procoedings 148, 

149,161,173,174,185 

Exhibition  bureau  for  fOTeIgn  trade 102 

Expenses,  general  (SM  o/»o  Costs) 27,86 

Experts,  factory 7 

Export  trade.    See  Foreign  trade. 

Extra  parts.  See  Common  parts;  Bepalr 
parts. 

Fargo  District  Retail  Implement  Dealers' 

Association. 152,153,210 

Farm-machinery  trade,  annual  sales 1,6 

capital  stock  of  concerns  engaged  in 22 

condition  of. 22 

Farm-paper  advertising.  See  Advertishig, 
(arm-paper. 

Farm  trucks,  increasing  use 37 

Farm-wagon  department,  Naticmal  Imple- 
ment and  Vehicle  Association.  See  Na- 
tional Implement  and  Vehicle  Associa- 
tion, trade  departments. 

Farm-wagon  manufacturers,  comparison  of 

costs  among 61 

decrease  in  number 37 

Farm-wagon  prices,  advances 22, 

23, 24, 25, 26, 27, 30, 33, 34, 36 

Farm-wagon  trade,  conditions 37,49 

Farmers'  credit  ratings,  prepared  by  dealers' 

tocaldubs. 7^79n 

Farmers'  cooperative  stores.  See  Cooperar 
tive  stares  of  farmers. 

Farmers'  Friend  Stacker  Co.,  merger  with 

Indiana  Manufactxiring  Co 113 

Fasteners,  top-box. 27 

Federal  corporation-tax  law 51,96-97 

Federation  of  implement  dealers.  See  Na- 
tional Federation  of  Implement  and 
Vehicle  Dealers'  Associations. 

Federation  of  lumbermen's  associations 186 

Federation  of  retail  merchants.  See  National 
Federation  of  Retail  Merchants. 

Financial  condition  of  dealers,  efforts  to  im^ 
prove. 81-83 


Fire  insurance,  interest  of  associations  in . .  57, 74-75 
statistics  collected  by  implement  manufac- 
turers        74 

Fire-preventing  device? 76 

F(ffeign  coimtries,  rejKvt  as  to  prospects  for 

trade  with 101 

tariff  laws  of,  bulletins  of  National  Imple- 
ment and  Vehicle  Association  on 100 

Foreign  trade,  facilities  of  National  Imple- 
ment and  Vehicle  Association  to  secure 

information  with  respect  to 100 

legislation  relating  to  the  tariff  and 97-102 

manners'    department,   National    Imple- 
ment and  Vehicle  Association 101,102 

Forest  Service,  United  States  Department  of 

Agriculture 66 

Franchise  fees.    Su  Taxation,  State,  of  cor- 
porations. 

Freight  auditing  bureatis 69, 70, 71, 73, 74n 

Freight  claims.    See  Freight  audithig  bu-; 
reaus. 

Freight  classifications 67, 68, 69, 70, 71 ,  72, 73 

Freight  overcharges  {tee  al$o  Freight  audit- 
tog  bureaus) 68,60 

Freight  rates.    See  Transp<Miation  charges. 

Freight-traffic  department.  National  Imple- 
ment and  Vehicle  Association 60, 

70,71,72,73 

Freight  transportation  charges.    Sef.  Trans- 
portation charges. 

"FuU-ltoe"  houses 84 

Oaar,  Scott  &  Co 112,115 

Qasolme-engine  manufacturers,  dealos  criti- 
cize distributing  methods  of. 15 J 

Oovmunent  investigation  of  associations  in 

Implement  trade 163-172 

Gowrie(Iowa)  Farmers' Elevator  Co..  156-158,189 
Grading  and  inspection  rules  for  wood  stock ..     60, 

61,62,64 
Grain-btoder  prices,  fixed  by  manufocturers. .       15 

variations  in 15 

Grain  binders,  complatots  of  dealers  against 

manufacturers  of 12,15,16 

conferences  between  manufacturers  of 8 

consolidation  of  manufacturers  attempted 

mlSQO 15 

costs  and  prices,  1898  to  1902 18 

distribution 6 

price  agreements  among  manufacturers 8 

Grain  cleats,  allowance  for 30 

Grato  drills.    See  Seeding  machmery. 
Grievance  committees  of  dealers'  associations, 
duty  of,  m  settlement  of  complaints 

(see  also  Complaints  by  dealers) 148, 172 

Grievances  of  dealers.    See  Complaints  by 
dealers. 

Bteirdware  dealers,  membership   m  imple- 
ment dealers' associations 183 

Hardwood  Manufacturers'  Association ^ 

Harrows,  advance  in  prices 19 

standard  equipment  for 48 

Harvester  committee,  dealers' 16, 133 

Harvesting-machine  companies,  n^otiations 

of  dealers'  associations  with 132-133 

petition   to    manufacturers    to    maintain 
prices 207 


).    i 


i 


I 


358 


Hai mlliit  iimiliinecompftnfas,  pri« catting 

by »1.M2 

Mill  to  iRvgnlar  dMkn  by ^ 

flte  fliM  Grain  binders. 
Hfty-pNM  manulM!tur«f8,   dMlm  crttfciM 

dMxibutittg  BMlbodt  of UO 

H»y  ptiwM,  co^>it«ttBn  wmmg  twiy  mi«i- 

CMsUuifS  oIL.... .-.•••••••••••♦••••••*••       • 

Harcnks  Buggy  Co 1* 

H«reiilit  SngioA  Co.,  aatei  to  nutt^Mntar 

bonsn -  lW-198 

Hom«-tnMl«  talks. ** 

Honfl8t«dv«rtidi«  Imp.  am  AdfVtlring, 

ln%%f<**ii  injitm  iiilwiimawitiitlnn  in. 

HQbi,  oooimtioB  of  NstJonal  Wagon  Manu- 

Aiwwl«ttnn  with  manulao- 

of • 


IHBBl. 


INDEX.  359 


Idaho  Retail  Hardwanand  Implement  Deal^ 

en*  Association. 1® 

Illinois,  Indnstrial-indemnity  legislation...  106,106 

Illinois  Ratoll  Impionuiit  Deakrs'  AsBoeia< 

tion ia-u,iw,aos,239 

Implement  Dealers'  Associatton  of  Northern 

Iowa ^^ 

ImplenMiit  Deakn' Bnlletin 17, 

86,130,131,136,208,205 

bnnoli  retail  stona 140,141 

Chantanqnaboma-tiadatalls 206 

floopenlftHi  between  jobben'  and  dealers' 

Qigaalsations 151,153 

eost  educational  borean. 226,227 

direct  aolee. 150,191,192,196 

194 
203 
194 
160 


215 

lao 


Kansas  City  Jobben,  trade  policy  of 

mail-order  advertising  in  local  newspapers. 

mail-order  houses 

MWssippi  lumbermen's  case 

official  organ  of  National  Federation  of 
Implement  and  Vehicle  Dealers'  Asso- 
ciations  

policy  of 

prici  fixing  by  local  dubs 209 

poblieation  begun ■"  17*130 

Western  association,  accomplishments  of.  148,143 
Implement  industry,  extent 1 

investment.. * 

number  of  companies  engaged 1 

Implement  and  Vehicle  Manu&cturers'  War 

tual  Fire  Insurance  Co 74 

Inoorporation  law,  national 98,94,96,96 

Indiana  Manufacturing  Co.,  acquisition  <tf 

patents  by 113, 116n,  116,121, 1280 

business  poUey  of 126,127 

GQooessiQOS  to  Uomsees,  allefed. lUn, 

123,123,124 

oontnmny  with  J.  I.  Ctee  Threshing  Ma- 

chine  Co 114-119,120-124 

Farmeis'  Friends  Stacker  Co.,  merger  with.     113 

formatioii ^^^ 

income  threatened  by  expiratkm  of  patents.     116 

Utintion  with  licensees. 122, 

122n,  123, 123n,  124, 124n,  125 
raanuflMsture  of  wind  stackers  b^un  by....     112 

negotiations  to  sen  shares  of H* 

negotiatiaos   with  officers  of  J.  I.   Case 

Threshing  Machine  Co. U^ 

116, 120, 121, 122, 123, 126,  m 


Indiana  Hanuftkotorlng  Co..  patants-Ucenae 

contaetaoC 56,113 

patentsipiii  i  hue  agreement  of lA 

122n,  123, 124, 126, 137 

price  of  wind  stackers  fixed  by 56 

Sattley  Stacker  Co.,  control  acquired 128D 

supplemental  contract   with  J.   L   Gms 

ThiwiiiivMaehineCo. 115 

trustees  appointed  for IIS 

wincMwker  patents,  control  of . .  117,118,119,125 
wind-ttMker  patents  -  Uoeose  contracts, 

changes  in. 115,116,124,125 

Seealao  Wind-stacker  patenta-Uoense  system. 
Industrial-indemnity  legislation,  interest  of 

asBodaUons  in 58,90,104-106 

Information,  secretaries'   work   in   supply- 

ll« 189-192,193,201 

Borean,  Lumbermen's 186 

dissemination  by  associations 182, 

185-189, 190, 19^-193, 196, 208 

exchange  of ,  regarding  costs 23 

object  of  disseminating 187,193 

Information  Bureau  of  the  National  Federa- 
tion of  Implement  and  Vehicle  Deaters^ 
Associations,  advkw  of  attorney  as  to 

method  of  conducting 188 

doubtful  legaUty 189 

formatitm 166,167,188 

inactivity 189 

incorporation 188 

names  d  manntwtnrers  disseminated  by. .     196 

purpose *188 

wort:  commended  by  federation  of  dealers' 

associations. 180 

work  proposed  fbr 185-189 

iDSuranoe  brokers,  arrangements  of  National 
Implement   and  Vehicle    AssociatioD 

with 75 

Insurance  committee  of  National  Association 
of  Agricultural  Implement  and  Vehide 

Manufacturers 74 

Insurance  department,  National  Implement 

and  Vehide  Association,  proposed 75 

Insurance  facilities,  advantage  to  associations 

inftoiishing 76 

Insurance,   industrial  Indemnity,   plan  to 
form  mutual  company  among  manu- 

liacturers 106 

Insurance  rates,  fire,  efforts  to  reduce 74-75 

Incerest,  as  an  item  in  cost  accounting. . .  51, 54, 241 
Intemattonal  Harvester  Co.,  conference  on 

standard  equipment 48 

tem-wagon  business 22,33,37,38,39,66tt 

freight  transportotion,  represented  at  hear- 
ings before  Interstate  Commerce  Com- 
mission        68 

irregular  agendes  discontinued 133 

margins  between  costs  and  prices 22 

Natiwial  Federation  of  Implement  and  Ve- 
hkle  Dealers'  .Associations,  negotia- 
tions with 132-133,208 

net  earnings 22 

number  of  retail  agents 1 

organization •       20 

prices  fixed  in  agency  contracts 208 

fffisoD-bctory  legislation,  effed  on 109-110 


'f\  X 


■*>^|  f 


:^ 


Ui 


Page. 
International  Harvester  Co.,  report  of  Com- 
missioner of  Corporations Ill 

salaried  agents 1^ 

Intemational  Harvester  Co.  of  America, 
license  contract  with  Indiana  Manu- 
facturing Co 124 

Interstoto  commerce,  efforts  of  manufacturers' 
associations  to  devise  plan  of  conduct- 
ing business  as 93-97 

Interstoto  Commerce  Commission,  hearings 

befora 68,70,72,73 

Iowa  Implement  Dealers*  Association 10 

attitude  toward  branch  retell  stores..  138, 140, 143 

oooperative  stores,  opposition  to 154-158,181 

court  decision  against  methods  used  by .  154-158,189 
Emerson  Manufacturing  Co.,  correspond- 
ence with 155,156,157 

litigation  with  Farmers'  Elevator  Co.,  of 

Oowrie,  Iowa 1^9 

local  clubs  organized  by 215,239 

Manufacturers'    Implement    and    Vehicle 

Club  of  Des  Moines,  cooperation  with..      150 

Irregular  agencies 129,132,133 

Insular  dealers,   conunent  of  Implement 

Dealers'  Bulletin 131 

sales  by  harvesting-machine  companies  to.      131 
Irregular  sales,  cause  formation  of  associar 

tions 129,131,187 

commissions  on 132, 163 

cooperation  between  jobbers'  and  dealers' 

organizations  regarding 150-152 

directories  of  dealers,  used  to  prevent 135 

dissemination  of  informatioi  regarding 172 

fitorts  to  prevent 17,130,155,156 

pledge  of  dealers  regarding 130 

uniform  complaint  blanks,  use  of,  to  report.     154 

Jackson  County,  Mich.,  local  club  among  deal- 
ers in  79n,210 

James  4k  Graham  Wagon  Co 29n 

Jobbers,  cooperation  with  dealers  in  resale 

price  fixfaig 207,208 

joint  catalogue-house  committee  of  dealers 

and 195 

manufacturers' contracts  with 27 

Membership  in  National  Implement  and 

Vehicle  Association 4 

Minneapolis,  attitude  toward  Intemational 

Harvester  Co 109n 

oooi>eration  with  manufacturers'  associa- 
tions in  opposiitcm  to  prison-factory 

legislation 107,108,109 

National  Plow  Association,  efforts  to  secure 

cooperation  of 42, 43, 44, 45 

opposition  to  dealers'  associations 151 

relations  with  Implement  manufacturers.       6, 

30,107,108,109,130 
Jobbers'   clubs,    cooperation   with   dealers' 

associations 5,90,136,150-152,195 

location 3,4 

special  cost  committee,  membership  In 220n 

See  also  Kansas  City  Implement  Dealers' 
Association;  Kansas  City  Implement, 
Vehicle  and  Hardware  Club;  Manufac- 
turers' Implement  and  Vehicle  Club  of 
Des  Moines;  Twin  City  Implement, 
Vehicle  and  Hardware  Club. 
Jobbing  arrangements,  cooperative 6 


Page. 
Kansas,  chattel-nuHtgt^e  law 79 

local  clubs  formed  by  dealers 213,214 

suit  to  test  foreign  corporation  law 94, 95 

Kansas  City  Implement  Dealers'  Association, 
conference  with  Kansas  dealers  {see  alto 
Kansas  City  Implement,  Vehicle  and 
HardwareClub) 139 

Kansas  City  Implement,  Vdiicle  and  Hard- 
ware Club,  cooperation  with  other  asso- 
ciations   133,134,150,162,194 

early  activities IS 

Kansas  City  Retell  Hardware  Dealers'  Club, 
affiliation  with  Western  Retell  Imple- 
ment, Vehicle  and  Hto-dware  Associa- 
tion   183,184 

Kansas  Retell  Implement  Dealers'  Associ£^ 
tion.  See  Western  Retell  Implement, 
Vehicle  and  Hardware  Associatioo. 

Kentucky  Wagon  Manufacturing  Co 28 

King,  Theophilus,  negotiations  to  sell  shares 

of  Indiana  Manufacturing  Co.  by 118 

I^abor,  hours  of,  interest  of  manufocturers' 

associations  in  legislation  regarding 57,58 

increase  in  cost  of  shop 27 

National  Council  for  Industrial  Defense 67ta 

organizations,  attitude  toward  prison-fac- 
tory labor  legislation  in  Minnesote 109n 

Lancaster  County  (Nebr.),  local  club  of  deal- 
ers       209 

Lancaster  County  (Pa.)  Farmers'  Association, 

opposition  to  sales  by  manufacturers  to .     179, 

180, 193 

L^al  advice,  to  dealers'  associations 183 

to  manufactvu'ers'  associations 80,90 

Legal  precautions 158-163 

Legality  of  association  work 32 

L^islation,  branding  goods 196 

dealers'  interest  in 4 

dealers'  opposition  to  parcel  post 198-202 

industrial   Indemnity.    See   Indnstrlal-in- 

demnity  legislation, 
labor.    See  Labor,  hours  of. 
manufacturers' associations' activities  as  to.  89-110 
manufacturers'  associations'  cooperat  ion  in .  92, 93 
National  Association  of  Agricultural  Imple- 
ment and  Vehicle  Manufacturers 89, 90 

National  Federation  of  Retail  Merchants' 

activities  as  to 200,202 

National  Implement  and  Vehicle  Associa- 
tion, interest  in. 58 

prison-factory.     See    Prison-factory   legis- 
lation. 
Stete,  activities  of  manufacturers'  associa- 
tions asto 13,89,92 

tariff  and  foreign  trade,  activities  of  manu- 
facturers' associations  as  to 97-102 

tire  widths 50 

warranty,  attitude  of  National  Implement 

and  Vehicle  Association  toward 86,87 

License  contract,  wind-stecker.    See  Wind- 
stacker  patents-license  system. 
List  prices.    See  Prices,  list. 

Listers,  standard  equipment  for 48 

Litigation,  activities  of  a.ssocIations  as  to  . .  90, 94, 95 
wind-stacker  patents 114-125 


I    i 


aeo 


iin>xz. 


INDEX. 


861 


II 


i" 


jrw|§w« 


LocaMhib  maveiiMnt,  tssbtanoe  by  manu- 

ftOtonntO 235,236,238,240 

«08t «diieat1onal  movement,  relation  to..  22S,240 

difBoalty  of  maintaining  interest 230,240 

•Obrts of  dealers  to  pnsli... 235,238 

powtb 215,229,235,238,240 

Local  clubs  <rf  dealers. 4.309 

articles  of  associations 162,168,238,242 

daaiofdealoisreacbed  by SM 

'   oast  edncatknal  movement,  relation  to —      H, 

233,234,235,341 

eoonty  agants  employed  to  organise 228 

development ^^ 

•ocdiaiiga  of  Information  tbroni^. . ..  211-218, 243 
indorsed  by  State  and  Interstate  assoela-     11, 

tions  of  dealers 17,213,214,227 

Umitations  <ni  aid  given  by  National  Implo* 

meat  and  Vehicle  Association 4, 

338,239,240,243 

membership,  eligibility  to «,183n 

ICichigan  Retail  Implement  and  Vehicle 

Dealers'  Association 's  experience  with.     343 
National  Federation  of  Implement  and  Ve- 
bJde   Dealers'   Associations,  attitado 

toward 215,216,217,227 

immber 233,239 

object 6,211,233,241,242,243 

officers  and  committees 6,6,217 

oiganixatlon,  •'  ready-made  helps  "tor. 21S 

price  agreements,  tendency  of  members  to 

attempt 210,214,241,243 

proceedings  at  meetings 209,213,214,215,229 

retail  prices,  influence  on 211, 

214,217,218,329,332,241,242,243 

twitory  covered 228,229.233 

Western  Betail  Implement,  Vehicle  and 
Hardware  Assoclatloa  recommends  for- 
mation of 211 

work 6, 17, 78-T9n,  213, 2U,  233, 241, 242 

Lock  chains ^ 

Lumber,  grading  and  inspection  rules  for 

hardwood 

mills,  ooq^Mration  with  implement  manu- 

fBcturers  in  standardizing  materials — 

prodnoers  of,  list  issued  by  National  Wagon 

Manufacturers' Association 

Secretaries  Bureau 200 

Lumbermen's  associations,  information  bu- 

186 


eo 


58 


flO 


206 


206 


McKatn,  A.  A.,  organiser  of  Indiana  Manu- 
facturing Co 111,113 

Mall-order  advertising,  Agricultural  Publish- 
ers' Association,  motution  adopted  by. 
ooantry-mwqpaper    publishers,    attitude 

toward 

duakrs'  request  of  manufacturers  not  to  ad- 
tin  papers  carrying 204,205 

t  to  oxdude  from  farm  papers 203-206 

Inde  papers,  refusal  to  publish 208 

Mail-order  houses,  advantages  claimed  by . . .     16B 
branding  goods  with  maker's  name  is 

means  of  opposition  to 196 

Chautauqua  home-trade  talks  in  opposi- 

tkmto M» 

Qonfamoe  of  dealers  and  manuliActarers  as 

toMllBtO 184, 1« 


Mail-order  houses,  cooperation  of  National 
Federation  of  Implement  and  Vehicle 
Dealers'  Associations  and  National  Fed- 
eration of  Retail  Merchants  m  opposi- 
tion to 206 

dealers' anoolatlons,  opposition. 4, 

166,183,193-206 

dealers  compile  list  Of 166,195 

efforts  to  prevent  State  fair  exhibit?  by  —     196 

factories,  implement,  purchased  by 169, 196 

Hercules  Engine  Co.,  sales  to 197-198 

Kansas  City  jobbers,  policy  toward 194 

legislation  against  misrepresentation  in  ad- 
vertising as  a  means  of  opposition  to.  202-303 
National  Federation  of  Implement  and 
Vshiele  Dealers'  Associations  requests 
manufacturers  to  discontinue  sales  to. .      196 

supplies,  efforts  to  cut  oft. 183,193-198 

See  also  Direct  sales. 

Mandt  Wagon  Co 66n 

Manufacturers'  associations,  development....        8 

merger • 

Manufactturers'  attitude  toward  cooperativ* 

buying  among  dealers 86 

Manufacturers,  fixing  of  retail  prices  by . . .  307,208 
Manufacturers'  Implement  and  Vehicle  Club 
of  Des  Moines,  cooperation  with  Iowa 

Implement  Dealers'  Association 150 

Manufacturers'  influence  on  retail  prices  {see 

aZ«o  Prices,  resale;  Prices,  retail) 7,8,309 

Manufacturers'  relations,  with  dealers 6, 7, 134 

with  jobbers • 

Manure  spreaders,  conference  among  manu- 
facturers of. 137 

conference  between  dealers  and  manufao- 

turers  as  to  trade  in 137 

dealers  reports  as  to  trade  In 138 

direct  sales  by  manufacturers  of 137 

Material  bureau.  National  Implement  and 

Vehicle  Associatk>n. 86 

National  Wagon  Manufacturers'  Associa- 
tion        88 

criticized  by  producers 81 

efforts  to  hiterest  outside  manufacturers.       62 

establishment  of 89 

value  to  members 81 

Materials,  changes  in 14 

cocqperation  among  manufacturers  to  jn'o- 

duce  supply  of. 59,65,66 

cooperative  purchase  of 68 

eostof,  advances 17, 

18,19,21,22,25,26,31,67,61,62 
discussion  by  special  trade  departments. 
National  Implement  and  Vehicle  Asso- 
ciation.   48,65 

effect  on  prices 216 

manufacturers'  association,  committee  on . .  69, 65 

producers,  list 60 

standardization 58-67 

steel,  advance  in  price. 68,60 

cooperation  among  manufacturers  in  pur- 
chase of  88 

freight  rate  hichided  in  cost  to  buyers 63 

proposed  changes  in  contracts  for 66 

report  of  committee  of  National  Imple- 
ment and  Vehicle  Association  as  to 
twifl  on.  ........•.•.•.•.....••...••...     UU 


:r^n 


^.     ;     A 


^     if: 


x      \ .-.  .-I. 


? 


I 


fl 


m 


Page. 
Materials,  report  to  manufacturers'  associa- 
tion as  to  tariff  on 98,99 

SDiplns,  exchanged  among  dealers  of  Na- 
tional Implement  and  Vehicle  Associa- 
tion         66 

unsatisfact(»y  conditioas  in  securing  bent- 
wood  stock 69 

Merdiant  marine,  resolutions  adopted  by  Nar 
tional  Implement  and  Vehicle  Associa- 
tion on  98,101 

Methods  of  dealers'  associations  in  adjusting 

complaints 152,154,1S5-193 

Mk^igan   Retail   Implement   and   Vehicle 

Dealers'  Association 11,180,239,242 

Michigan  Retail  Lumber  Dealers' Association     260 
Michigan,  suit  of  National  Association  of  Ag- 
ricultural    Implement    and    Vehicle 
Manufacturers  to  test  foreign  corporar 

tion  law  of W 

Mid-West  Retail  Implement  Dealers'  Asso- 
ciation   11,162,163,239 

Milbum  Wagon  Co 28n 

Minneapolis,    opposition    to    prlson-factcffy 

legislation  by  jobbers  at 107, 108, 109 

Minneapolis  Threshing  Machine  Co 12!hi 

Minnesota,  opposition  of  jobbers  and  manu- 
facturers to  prison-factary  legisla- 
tion hi 107,108,109 

Minnesota  Manufacturers' Association 108,109 

Minnesota  Retail  Hardware  Association 183n 

liinnesota  Retail  Implement  Dealers'  Asso- 
ciation   11,76,172,173,234,239 

cooperation  with  Twin  City  Implement, 

Vehicle  and  Hardware  Club 160 

cooperative  stores,  farmers',  opposed  by..  175-178 

local  clubs  in  territory  oL 239 

protective  activities  of 182,183 

Minnesota  Retail  Implement  Dealers'  Mutual 

Fire  Insurance  Co 76n 

Mississippi  lumbermen's  case 159, 160, 190 

Mississippi  Valley  Implement  and  Vehicle 

Dealers'  Association U 

Missouri,  local  clubs  formed  by  dealers  in 214 

Missouri  Slope  Retail  Implement  Dealers' 

Association 210 

Mitchell  &  Lewis  Co.  (Ltd.) 28n 

Moline  Plow  Co 37,6en 

Moltoe  Wagon  Co. 20n 

Monopolistic  conditions  in  farm-machinery 

trade 21 

Monopoly    of    patents.    See    Wind-stacker 

patents-license  system. 
Montana  Implement  Dealers'  Association —     lOn 
Mortgage  laws,  interest  of  associations  in —  79,80 

National  Association  of  Agricultural  Imple- 
ment and  Vehicle  Manufacturers 2, 57, 

63,64,220n 

activities,  cost  educational  movement ^26 

fire  insurance 74 

freight  transportation 67,68,69 

industrial  indemnity  and  insurance —  104, 105 

legislation 89,94,97,98,99,199 

litigation 90,94,95 

patent  laws 102 

tariff  legislation 97,98,99 

attitude  toward,  branch  retail  stores 139, 142 


Page. 
National  Association  of  Agricultural  Imple- 
ment and  Vehicle  Manufacturers,  atti- 
tude toward,  complaints  of  dealers. .  133,134 
dealers'  associations ....  79, 133, 134, 136, 137, 151 

direct  sales .- 144,146,146 

mail-order  houses — —  194,195,199 

psircel-post  legislation 199 

price  agreements 9,17 

prison-factory  legislation 107,lOS,109 

Torrey  bankruptcy  bill 79 

uniform  cost  accounting 48n 

uniform  order  blanks 79 

bullotms 69 

conferences  with  other  associations 134, 

136,144,216 

cooperation  with  other  associatioiLs 80, 

89, 99, 107, 109, 1 09, 133, 135, 136, 194 

early  activities 13 

efforts  to  improve  credits 79 

eff(Hts  to  shorten  terms 44 

formation 8 

International   Harvester  Co.,  n^otiations 

with 132-133 

membership,  qualifications 196 

merged  with  other  associations 9 

National  Association  of  Credit  Men,  exchange 

of  credit  information 77 

National  Implement  and  Vehicle  Associa- 
tion, relations  with 96 

National  Association  of  Factory  Mutual  In- 
surance C  OS 74 

National  Association  of  Grahi  Drill  Manufac- 
turers  2,8,20 

cost  educat  ional  movement  indorsed  by  —      226 

merged  with  other  associations 9, 47 

National  ^Association  of  Manufacturers 57n, 

90,95,98,105 
National  Association  of  ThreshCT  Manufac- 
turers    2n,13,56 

credits,  recommendati(ms  on. 81 

National  Federation  of  Implement  and  Ve- 
hicle Dealers'   Associations'  relaticma 

with 147 

price  activities 55-56 

National  Business  League  of  America 58 

National  Implement  and  Vehicle  Associa- 
tion, cooperation  with 91 

National  Council  for  Industrial  Defense,  pur- 
pose     57n 

National  Federation  of  Implement  and  Vehi- 
cle Dealers'  Associations,  admonition 
to  secretaries  of  constituent  associar 

tions 158,167,184,185 

arrangements  to  supply  dealers  with  names 
of    manufacturers    making    irr^ular 

sales 196,191,192,193,194,196 

attitude  toward,  advertising  of  mail-order 

houses  in  farm  papers 203,205 

branch  retail  stores  of  manufacturers 138-143 

directsellfag 128,144,161,184,185,190 

farmers'  cooperative  stores 1 55, 1 79, 180, 181 

legislation  against  misrepresentation  in 

advertising 202-203 

branding  goods  with  maker's  name...      196 

mail-order  houses 192, 

194, 195, 199, 200, 201, 203, 205, 206 
parcel-post  legislation.... ..••••...•.••—     201 


)    i 


INDEX. 


Natkmal  Fedmtioa  of  taipleiiieDt  and 
Vtiieto  Utatara*  AsMetotions,  bnmch 
rotaU  tCaiM  iA  nHamtecturani,  stand- 

arditation  of  farm  macIilDery ^ 

sjmdJcate  c&ta]<^ues 86 

miifonaipn^wrty  statement 78 

complatiiti,  dealers',  adjustment 1^7* 

1£2-154»  in,  162, 163, 164, 166, 166, 167, 
168, 174, 179,180, 184, 186, 190,  IM,  196 

flOBleniMM  Willi  maantectiirers. 86, 

87, 88, 136, 138, 144. 194, 316, 230D 
With  National  Implement  and  V  hide 
Association.    Su  National  Implement 
and  VefaidB  Aasoeiatkm. 

coDftlliiient  associations,  relations  wltlt 6, 

158,159,163,167,186,187 

constitution  ol ^^^ 

•ooperation  witb,  American  Leafoe  of  A«o- 

ciations. ** 

National  Federation  of  Retail  Merchants.    193, 

300,306 

KaUonal  Haidwara  Dealers'  Anoeiitian.     UB 
National  Implement  and  Veliicle  Assodi- 

Hon 137,308,206,233 

oost  educatkmal  activities 3»,234, 336, 337, 

238,  239,  333, 233,  335, 336, 837, 388, 339 

coat  suggestions  indorsed  by 334 

fire-insurance  arrangements  for  members 

of 75-Tto 

lomialloii.. l.,133 

fe«]|Hht  auditing  service  proposed  for 73-74n 

fundammtal  principle  of. 138 

Government  investigation  of  activities 164 

Implement  Dealers'  Bulletin  ad<H>ted  as 

official  organ 21* 

Information,  Bureau  of. 167, 18^-189, 196 

Information,  exchange  of,  among  secretariBS 

'  of  eonstituent  associations 198 

tnlflraitional  Harmtcr  Co.,  negotiations 

with 208 

local  dnbs,  dealers',  aidad  by U, 

163,315,216,217,235,237,238 
mailorder  houses,  eflwts  to  prevent  sales 

by  manufacturers  to. 194,196 

■lembership 1,3,4,10-11 

minutes 138 

National  Association  of  Thresher  Manufku^ 

turers,  rations  with 147 

National  Implement  and  Vehicle  Associa- 
tion indorses  general  p(dicy  of. 170 

oIKoers 4,6 

plan  of  organization 4 

poUcy  in  adjusting  dealers'  complaints 163, 

164,165,166,167,168,189,170.196 
prices, n^TOtiations with  International  Har- 
vester Co.  as  to  maintenance  of  retail..     208 

8e(3«tariBs' Association  of 6,193 

unlionn   articles   oC  association   recom- 
mended by 183,186,187,237,238 

unifcnrm  complaint  blanks  adopted  by 154 

vorkof 4,137,161, 

183, 163, 164, 165, 166, 167, 168, 184, 185, 188, 190 
National  Federatkn  of  Retafl  Merchants  —    192, 

300,301,303,206 

National  Fire  Pxoteclive  Association 74 


National  Hardware  Dealers'  Aflsool»tkn, 
coopoatkm  with  National  Federation 
of  latplement  and  Vehicle  Dealers' 
AsRociatioaa  aa  to  parcel-post  legisla- 
tion      w^ 

National  Hardwood  Lumber  Association. .  60, 63, 68 

National  Implement  and  Vehicle  Association  1 

actirttiesM  to,  cost  education  of  dealers...      83, 

83,330,332,233.238,239 

cradlt  and  collection  matters 76,77,78,88 

direct  ntaa ^^ 

fire  insurance 75 

freight«lMiifl«tlan 67, 

68,69,70,71,72,73 

industrial  indemnity  and  indemnity  in- 

68,104-106 

,  Federal  corporation  tax-law. ..  96-97 

ptttent 10^104 

prisan-factory 108-110 

warranty 87 

titration W,95 

prioeB **-*• 

itaadardization,  cost  accounting 68 

equipment 47.48 

flMStory  products 47,52.53,86 

matwtels 65-67 

tarifl  and  foreign  trade 99,100,101 

attitude  toward,  cooperative  stores 180,181 

man-order  advertising 303,203,204,206.206 


3 


bnHettn 3,69,82,81 

eommittees 3,3,13a 

cooperation  with.  National  Federation  of 
Imidement  and  Vehide  Dealeraf  Aaood* 

atlano 86,86,87,88,146,170,30) 

other  eommercial  bodies M> 

95, 96, 97, 100, 101 ,  105, 108,  Iff 
Wwtem  Retafl  Implement,  Vehicle  and 

Hardware  Association ,..  83,110,146 

oost^MXWuntlng    bureau,    functions    pro- 
posed for 88 

ooetacoounting  system,  furm-wagon  de- 
partment  M»58 

dealers' aaMKiations  indorsed  by 170 

dWributlon,  efforts  to  reduce  costs 84-88 

dues  of  members 3 

executive  committee,  duties 8 

foreign  trade  managers'  department 101, 103 

treight-trafBc  department 69, 70, 71, 73,73 

grain-drill  department.  See  National  Im- 
plement and  Vehicle  Association,  trade 
departments. 

O  ovemment  investigation 163, 163, 164, 168 

incorporation 8 

local-club  movement  aided  by .  4, 238, 239, 240, 242 

meetings ^ 

members,  classesof •••>     %8 

number  of 1 

membership  in  other  associations 91,9^ 

National   Federation  of  Implement  and 

Vehicle  Dealers'  Associations  indorsed.      170 

plan  of  organization 3 

jdow  and  tlOage-implement  department. 
8u  National  Implement  and  Vehicle 
Aaoociation,  trade  departmenta. 


INDEX. 


36S 


\ 


I 


crl  ^ 


if^ 


■Y 


1 


Page. 
Hational  Implement  and  Vehicle  Association, 

politic&i  action,  committee  on 90,91 

price  activities ^^-56 

receipts ^ 

resolutions  adopted 3n 

retail  system  of  distribution  indorsed 169, 

170,237 

sales  managers'  department. .  2, 78, 82, 83, 233, 236 

scope  of  activities ^ 

secretary  and  general  manager,  duties 2 

selling  expenses,  efforts  to  reduce 84-88 

trade  departments 2, 9, 41, 46-56, 64, 65-67, 86 

wagon  department.    See  National  Imple- 
ment and  Vehicle  Association,  trade 
departments. 
National  legislation.    See  Legislation. 
National  One-Cent  Letter-Postage  Associa- 
tion   201,202 

National  Plow  Association 2,76,220n 

cooperation  with  National  Association  of 
Agricultural  Implement  and  Vehicle 

Manufacturers 80 

cost  educational  movement  indorsed  by . . .      226 

eoit  oystem  recommended  by 45 

efforts  to  shorten  terms 44-45 

freight  transportation  committee  created  by       68 

merged  with  other  associations 9,45 

price  activities <l-45 

iwommendations,  extent  of  adoption  by 

members 41-42,43 

standardization  of  materials  by 63-64 

uniform  promissory  note  discussed 80 

National  Tariff  Commission  Association i9 

National    Wagon    Manufacturers'    Associa- 
tion  2,8,9,lln,12,13,18,220n 

activities  as  to,  cost  educational  movement .    218, 

224,225 

fire  insurance 74 

transportation  charges 67 

agreements  at  meetings 29,30 

benefits  derived  by  members 33 

commission  contracts  discussed  by  mem- 
bers         80 

cooperation    with    wagon-hub    manufac- 
turers        63 

cost  accounting  committee  appointed 27 

executive  committee 29 

legality  of  worlc 32 

material  bureau.. 59,62 

materials,  efforts  to  standardize 58-63 

increased  costs  discussed 19 

meetings 17,18,19,29 

merger  with  other  associations 9 

pool  attempted 8,12 

price  activities 8,11,19,22-41 

reorganization 27,28,29 

Eoutheastem  department 29,39,40,76 

secretary,  duties 28 

VAicle  Woodstock  Co.,  conference  with..       .'9 

warranty  discussed  by  members 13 

National  Wagon  Stock  Co f9,65,66 

Nebraska  and  Western  Iowa  Retail  Imple- 
ment and  Vehicle  Dealers'  Association.  10, 148 

Nethery  patents 114 

New  machines,  difficulties  of  introducing —       ^b 
New    York    State    Retail    Implement   and 

Vehicle  Dealers' Association 11,172 


Nichols  &  Shepard  Co I22n 

North  Dakota,  legislation  as  to  warranty 86,87 

North  Dakota  and  Northwestern  Minnesota 

Implement  D««lers'  Association 11 

Northwestern  Implement  Dealers'  Associa^ 

tlon 10 

Northwestern  Plow  Association 8 

costs,  selling,  efforts  to  reduce 13 

output,  limitation 12 

prices,  uniform 12 

Northwestern  Plow  and  Cultivator  Associa- 
tion, recommendation  to  advance  prices  19 
Northwestern  Plow  and  Implement  Associa- 
tion   8 

Norton  patents 116,117,121 

Note  settlements 44 

Official  classification  committee 72,73 

Ohio,  activities  of  National  Implement  and 
Vehicle    Association   as    to   proposed 

industrial-indemnity  legislation  in 106 

Oliver  Chilled  Plow  Works 43,44 

Order  blanks,  uniform,  proposed  by  National 
Association  of  Agricultural  Implement 

and  Vehicle  Manufacturers 79 

Output,  limitation  of 9,12 

Overcrowding  territory 88 

Overloading  dealers 88 

Overproduction,  effect  of 8 

Pacific-Northwest  Hardware  and  Implement 

Association lOn 

Panic  of  1907,  effect  on  farm-wagon  trade 35,36 

Parcel-post  legislation,  activities  of  associa- 
tions in  opposition 90, 196, 198-202 

Patent  laws,  activities  of  implement  msuiu- 

lacturers'  associations  as  to 102-104 

Patentees,  foreign,  attitude  of  National  Im- 
plement and  Vehiele  Association  as  to 

privileges  of 108 

Patents,  Commissioner  of 108 

license  system,  Indiana  Manufacturing  Co. 
See  Wind-stacker  patents-license  sys- 
tem. 

monopoly  of  wind-stacker 117,118,119,121 

National  Implement  and  Vehicle  Associar 

tion,  committee  on 103,104 

to  act  as  mediator  in  disputes  concerning.      104 

opposition  to  compulsory  license  laws 102, 

103,104 
purchase    {tgreement    {su    aUo    Wind- 
stacker  patents-license  system) 122, 

123,124,126,127 
United  States  House  of  Representatives, 

committee  on 102,104 

wind-stacker,  concentration  of  ownership 
(jtee  alao  Wind-stacker  patents-license 

system) 111-127 

Penalties  on  members  of  dealers'  organiza- 
tions {see  alto  Agreements  among  deal- 
ers)   ; 187,238 

Pennsylvania  and  New  Jersey  Retail  Imple- 
ment and  Vehicle  Dealers'  Association.      11, 

179. 180, 181 
sales  to  fanners'  cooperative  stores  opposed 

by  179-180 

Personal  acquaintance,  value  in  local-club 

work 212,213 


>*■ 


/    (. 


364 


INDEX. 


8,» 


208 
64 


Page. 
n<dg0  of  members  of  dealers'  assodatknis 

{m  abo  Agreements  among  dealers) . .    185, 

187,206 

Flow  associations  (««  also  Northwestern  Plow 
Association;  Northwestern  Plow  and 
Cultivator  Association;  Northwestern 
Plow  and  Implement  Association;  Na* 
tional  Plow  Association;  and  National 
Implement  and  Vehicle  Association, 
trade  departments) ■ 

Plow-beam  bUlets.  standardization  pro- 
posed  ^'^ 

Plow  BMaiufacturers,  agency  contracts 7,208 

consolidation  amoo^ ^* 

distributing  arrangements * 

early  organisation  among * 

meetings 17,19,20 

price  agreements  among * 

prices,  list,  in  eontracts 

specifications,  standard,  activities  as  to. . . . 
Pneumatic  stackers.    See  Wind  stackers. 

Pole  stock,  grading  and  Inspection  rules 64, 66 

Political  action,  committee  on *>'*1 

Pool,  attempted  by  wagon  manufscturers...    8,12 

Port  Huron  Engine  and  Thresher  Co 122n 

Portland,  Oreg.,  branch  retail  stores  in  tetrl- 

loty  around ^^ 

P«»tage,  1-cent  letter,  indorsed  by  dealers* 

associations *^ 

Postal  laws,  eflwts  of  dealers'  associations  to 

secure  revision 201,208 

Price  agreements,  among  dealers 16> 

7911,208,200,210,214,243 

among  manufocturers 8,17,27,65-56 

relation  to  coat  educational  movement 241 

temptation  to,  in  discussion  of  costs 66 

Price  concessions,  Indiana  Manufacturing 

Co.,  alleged  concessions  by 122,124 

International  Harvester  Co.,  effect  of  for- 
mation on ** 

prevalence  of 1* 

thresher  manulEurturers  discuss ••...       66 

au  olM  Price  cutting. 

Price  control, difficulties  of 24 

Price  cutting,  among  manufacturers —  7,37,56,81 

retaU,  efforts  to  stop 4,5,7,15,16, 17,207-243 

Price  lists,  standard,  relation  of  standard 

specifications  to 36 

uniftom 23,36, 40,41,fiO,Ha08,209 

Prices,  associations' efforts  to  advance 21 

ebaracteristics  of  farm  machinery 14 

commodity,  advance  in 21 

cooperative  stores,  turners',  influence 181 

cost  accounting,  as  basis  for 32,218-243 

dealers,  inexperienced,  hifluence  on. .  218, 219, 220 

decline  hi,  1880  to  1890 15 

dtoerimination  by  manulacturars 14 

giain-drlll *7 

barvesting-machhiery  manutscturers,  petl- 

ticmedtofix -» 207 

tntamation,  exchange  of,  as  to 23, 

24,25,54-66,211-218 
Jobbofs',  advanced  by  wagon  manufM- 

tmers * 

ltat>  adk^ted  by  Nebraska  dealers 209 

■dvBQtages  of,  in  implement  tradA 42-48 


Paee. 


Prloe8,liftfum  wagons  and  parti  of  wagons.     11, 

19,27,28,29,50 

plows  and  tillage  implements 41,42,206 

threshing  machinery 56 

local  clubs,  dealers',  influence  on 211-218, 

230,237,241,242 

Su  also  Price  lists. 

lower,  causes  of.  1880  to  1890 U 

materials,  increased  cost  of,  effect  on 216 

niinitnnm     Su  Pricc  Usts;    Prices,  list; 

Prices,  net;  Prices,  uniformity  in- 
National  Implement  and  Vehicle  Associa- 
tion, activities  as  to 4ft-66 

National  Wagon  Manufacturers'  Associa- 

ticn,  action  rescinding  resolutions  on..       82 
net,  adopted  by  National  Association  of 

Thresher  Manufacturers 6S 

Northwestern  Plow  and  Cultivator  Asso- 
ciation, influence  on 12 

patent  licensees  required  to  malntAtn  uni- 
form  ^ 1" 

plow,  advanca !• 

regulation  of,  relation  of  associations  to  —     S3, 

54,55,187,237 
retail,  cost  educational  movement,  rela- 
tion to 54-65,226,241-243 

Hall  In,  1880  to  1890 t  13-13 

manufacturers' interest  in 207 

See  also  Price  list;   Prices,  list;   Prices, 
uniformity  in. 

resala 207,208 

specifications,  standard,  effect  on 28,88 

standardization  of,  for  farm  wagons 26 

statistical  treatment  of  farm  machinery 13,14 

sted,  complaint  of  implement  manufactur- 
ers        88 

threshing  machinery,  discounts  on 81 

tire,  attempt  to  esublish 27 

uniformity  in,  comparison  of  costs  In  rela* 

tton  to H» 

concerted  action  among  competitors  to  es- 
tablish        » 

Dakota  dealers  faidorse 210 

dIfBculties  in  securtag 208,209 

manufacturers'      recommendations     to 

dealers  as  to 209 

Northwestern  Plow  Association 12 

patented  articles 126 

standard  specifications  as  a  basis  for 14,28 

Western  Retail  Implement,  Vehicle  and 
Hardware  Association,  report  of  har- 
vester committee  on 16 

wind-stacker    patents-license    contracts    112, 

113,117,118 
See  also  Price  lists,  uniform. 

variations  in 13,14,23 

wagon,  advances 22, 

26, 27, 28, 29, 30, 31 ,  32, 33, 35, 37, 38, 39, 49 

eziaiange  of  information  on 24,25 

proposed  consolidation  of  companies  to 

control W 

wholesale,    activities    of    manufacturers' 

associations  regarding 21-66 

compilation 89 

ooncessions 25 

maintf"^"*^  ....••••••••••••••••••••••••  28,49 


INDEX. 


365 


o- 


^ 


^^ 


I 


^t 


I 


Page. 
I,  wholesale,  i>eriodio  adjustment  recom- 

-- . .  mended  by  wagon  manufacturers 86 

reductions 24,25 

wlad-stacker  {su  also  Wind-stacker  patents- 

'   license  system) ^ 

Prison-factory  legislation 90, 105, 106,107-UO 

Producers  of  materials,  agreements  as  to  grad- 
ing and  inspection  rules  with  manufao- 

.    turers ®2,63 

list  of,  issued  by  Natfonal  Wagon  Manufac- 
turers' Association ^ 

Production,  limitation  of,  among  wagon  man- 
ufacturers m  1908 86 

provisfens  of  articles  of  association  of  deal- 
ers' associations  as  to 187 

Profits,  manufacturers'  interest  ta  dealers' ...     207 
pooling  of,  provisions  of  articles  of  associa- 

tton  of  dealers' organizations  as  to 187 

Promissory    note,    uniform,    discussed    by 

National  Plow  Association 80 

Promissory  notes,  taxed  to  State  of  Arkansas.       95 

Property  statements,  uniform 78, 88 

Protection  to  dealers,  defined 148 

efforts  to  secure 128-206 

importance  of 184,185 

Information  Bureau  formed 188 

hiformation  supplied  by  secretaries  of  deal- 
ers' associations 191,192 

methods  hidorsed  by  dealers'  associations 

to  secure 

provisions  of  uniform  articles  of  association 

on 

Protective  activities  of  dealers'  associations, 

scope 183-185 

statement  of  secretary  of  National  Fed- 
eration of  Implement  and  Vehicle  Deal- 
ers'Associations  as  to 164,165, 

166,167,168,173,174 
Public  opinion,  opposition  by  associations  to 
parcel-post  legislation  through  attempts 

to  hifluence 199,201 

Poblications,  implement  trade.    S«e  Trade 
papers;  Implement  Dealers'  Bulletin; 
Retailers'  Sentmel,  etc. 
Pump  manufocturers,  conference  of  dealers' 

federation  with 138 

Pumps,  cooperation  among  manufacturers  of.        8 
Purchasing   agents,    proposed   organization 

among 60, 66, 67 

Pure  advertising  law.    See  Advertishig,  leg- 
islation against  misrepresentation  to. 


148 


163 


Question  box  at  meettogs  of  dealers'  associap 
tions 


197 


^ 


Baiboad  classifications.  Su  Freight  classi- 
fications. 

Railroad  rates.    See  Transportation  charges. 

Railroads,  negotiations  of  implement  manu- 
facturers with 67-73 

Rate-advance  cases,  decided  by  Interstate 

Commerce  Commission 68 

Reciprocal  Underwriters 75-76n 

Reciprocity  with  Canada 99,100 

Reduction  of  costs.  8e*  Costs,  efforts  to  re- 
duce. 


Fafla. 

Regular  dealer  defined I* 

Reorganization  committee  of  Nationa  IWagon 

Manufactiu-ers'  Association 28,29 

Repair  parts,  threshing  machinery 147 

wagon  {see  also  Common  parts). . .  32, 33, 40, 41, 50 

"Reputable"  manufacturers 148, 150 

Resale  price  maintenance  (.see  also  Retail  price 

mamtenance) 12,16,17,207-208,240 

Restriction  of  retail  trade  to  retail  dealers.  128-206 
Retail  Implement   Dealers'   Association  of 
South  Dakota,  southwestern  Minne- 
sota, and  northwestern  Iowa 10, 11 

Retail  Implement  Dealers'  Association  of  the 

West  and  Northwest 9,11,13 

Retail  Implement  Dealers'  Mutual  Fire  In- 
surance Co.  of  Minnesota 76n 

Retail  Merchants,  National  Federation  of.  192,200, 

201,208,206 
Retail  price  maintenance  (see  also  Resale 

price  mamtensjice) 207-243 

Retail  prices.    See  Prices,  retail. 
Retail  system  of  distribution  {see  also  Distri- 
bution)      129 

Retail  trade,  dealers' claim  to 128,129 

restriction  to  retail  dealers 128-206 

Retailers'  Sentmel,  oflacial  organ  of  Iowa  Im- 
plement Dealers'  Association 155, 157 

Royalties,  patent.    SwWmd-stacker  patents- 
license  system. 

Rumely,  M.,  Co 122n 

Russia,  abrogation  of  treaty  with,  effect  on 

implement  trade 100,101 

Sale  contracts.    See  Contracts,  sale. 
Sales,  direct.    See  Direct  sales, 
irregular.    See  Irregular  sales. 

security  for 79-80 

Sales  managers'  department,  National  Imple- 
ment and  Vehicle  Association 2, 78, 82, 

83,233,235,236 
Sattley  Stacker  Co.,  control  by  Indiana  Man- 

u&M^uring  Co 113,125n 

Scale  manu^turers,  dealers  criticize  distrib- 
uting methods  of 150 

Schuttler,  Peter,  Co 29 

Seats,  sprmg,  wholesale  prices 30 

Secretaries'  Association  of  the  National  Fed- 
eration of  Implement  and  Vehicle  Deal- 
ers' Associations 5,193 

Security  for  sales 79-80 

Seedtog  machmery,  cooperation  among  manu- 

facturersof 8,20 

distribution 8 

Selltog  expenses.    See  Costs. 

Selling  organizations 84 

Service,  dealers' clahn  as  to 128,129,171 

excessive  demands  for,  as  an  item  to  cost  of 

distribution 87 

Shippers,  railroad,  conference  of 68 

Sizes,  elimination  of  unnecessary 47, 52, 86, 88 

Slat  stackers.    See  Sattley  Stacker  Co. 
South   America,   manufacturers   tovestigate 

trade  conditions  to 98 

South  Dakota,  decision  of  Supreme  Court  of 
State  <rf,  appealed  to  United  States  Su- 
preme Court 91 


i 


366 


INDEX. 


Fftge. 


Booth  Dakota  Retail  MeKHaBts*  and  Haid- 
van  Dcalos'  AaoeialiaD,  salt  of  Mont- 

iomery  Ward  A  Co.,  agaiDtt 105 

Booth  Platte  AaBodatJOD 208 

aontheastem  depaitmeiit  of  NaliOBal  Wacon 

Maaufaotarers' Aasoeiatloo 20,38,40^70 

SontlienidaadfloatkHi  committee 70^72,18 

Soathwestem  Lombennen's  Association, 
National  Federation  of  Implement  and 
Vdiide  Dealers'  Associations  discuss 

oonsUtution  and  by-laws  of 1S6 

Boothwestcm    JLomher    Dealers'    Aaocia- 

tioD 200,202 

Special  cost  committee 230,234,227,228 

Specificati(His,  standard,  activitiea  of  mano- 

lactuiers'  associations 29,41,47,63,64 

•drantages 62,64 

QOil  S3rstem  recommended  by  National 
Implement  and  Vehidd  Association,  re- 
lation to * 

dUBcoltiesaffixinK 28 

importance  of,  in  cost  accounting 46,51 

materials 58-07 

plows  and  tillage  implements 53,53 

progress  of  movement  for 30,31 

uniform  price  list,  relation ». 28,36 

wagons ,.,„..•.....  37,28 

See  alto  Standardization. 

Spoke  manofiactnrers' association 50,60 

Spokes,  grading  and  inspection  rules 60 

Standard  dimensions 60,61 

Standardisation,  cooperation  between  mana> 

faetorers  and  dealers  to  promote 80 

costs,  selUng,  reduced  by 80 

difficulties. M 

equipment.    SM  Equipment,  standard. 

lire  risks - '^ 

products 1^ 

rehition  to  prices '--       1* 

secretaries  of  Iterated  dealers'  associations 

oonierwithmanufoctorerson.f. 88 

•sedinK  machinery 47,52,63 

See  alw  Specifications,  standard. 
State  and  interstate  associatims  of  dealers. .  5,9-11 

articles  Qiaaiociation 5,141,186,187 

ooopoatiaB  with  Jobbers' dubs 5,90,217 

eoecntihre  sessions 1*8 

methods  of  adjosting  complafaits 147-152,154 

object 187 

relatioas  with  dealera' local  clubs 217 

nport  of  eommittee  of  manufocturers'  aaso- 

dations  as  to  work 137 

State  Department,  reciprocity  treaties  negoti- 
ated   « 

State  legfelation.    See  Legislation. 

State  taxation  of  foreign  corpwations....  98,98-96 

^States'  committee" 88 

Btatirties,  fire  insurance,  oolleeted  by  Imi^ 

ment  mannfbctureis 74 

labor,  committee  of  National  Wagon  Manu- 

fltcturers' Association  on 28 

price,  in  the  farm-madilnery  trade 21 

Steel,  advance  in  price  of 58,50 

priees  at  delivered  points 03 

StMl,  eort  €f,  dlwnsaed  by  plow  mannfMV 

...., 48,48 


Fagt. 
St  el  manutectnreis,  ciMiwimlnnii  to  price  to 

implement  mamfeotorers  by 18 

Steel  producers,  listed  in  pamphlet  issued  by 
National  Wagon  Manufecturers'  Asso- 
ciation.        00 

Steet.  report  of  committee  of  National 
Association  of  Agrkniltural  Implement 
and  Vehide  Manufiscturers  as  to  tariff 

on 08 

Stevens  bill aD8,240n 

Studebaker  Bros.  Ifanufacturing  Co 28,33,30 

Studebaker  Corporation OOn 

Supply  houses 183 

Supreme  Court  of  the  United  States 94,95,96 

suit  of  TnHfrm  Manufacturing  Co.  against 
J,  L  Oaae  Threshing  Machine  Co.  ap- 
pealed to 118,121 

Syndkiate  catalogues 80 

Turn  Boaxd 99,101 

Tariff  laws  of  foreign  countrkis,  bulletins  of 
Ni^ional     Implement     and     Vehicle 

Aaodattonon 100 

Tariff  legislatkm,  interest  of  associations  in  . .      13, 

90,96,97-103 
Tariff,  steel,  attitude  of  implement  manu- 

tactTirers  as  to 98,100 

Tax,  Federal  corporatfcxi 06-87 

Taxation  of  oorporatkms,  interest  of  associar 

tionsin. 90,9»-87 

Taxpayers,  movement  to  investigate  cost  of 

prison  manufactxiring  ftv  benefit  of —     UO 
Terms,  eflorts  of  Nattonal   Association  of 
Agricolttiral  Implement  and  Vehicle 

Manufacturers  to  shorten 44 

efforts  of  National  Plow  Association  to 

shorten 44-45 

efforts  of  Natk>nal  Wagon  ManufocturerS* 

Association  to  shorten 30,35 

kng,  advantages  to  large  companies 37,84 

Iong,asanltemof  cost  of  distribution 86 

recommendatk>ns  of  National  Associatun  of 

Thresher  Manufacturers 81 

Territorial  lines  in  agency  contracts 17 

Texas,  branch  retail  stores  in 138 

suit  to  test  fbreign  corporatwn  law  of 94,95 

Texas  Hardware  and  Implement  Associa- 
tion   11,13S 

Thresher  manufacturers,  direct  sales 7 

National  Associatton  of 2,8,56,56,81,147 

negotktions  to  sell  shares  in  Indiana  Manu- 
facturing Co.  to  committee  of 118 

price  cutting  among 81 

prices,  oniform,  for  wind  stackers ia3-124n 

relations  with  dealers'  associatk>ns 146-147 

Threshing   machinery,    cooperation   among 

early  manufacturers S 

distributfcjn 6,146,147 

Thresher  trade,  credits 80-81 

patent-holding  company  in Ill 

Set  also  Wind-staeker  patents-lksense  sys- 


Tires,  standardisation 29,50.60 

uniform  price  list 23,37,39,33,34,60 

Title  danae  hi  contracts 80 

Torrey  bankruptcy  bUL. ....•...•••••••— ••      79 


n^DEX. 


V 


ikf 


-4 


A 


Arf  |. 


'•4»' 


Page. 

Trade  departments,  National  Implement  and 

Vehicle     Association.    See     National 

Implement  and  Vehide  Association, 

trade  departments. 

Trade  ethics  (see  aUo  Retail  trade,  dealers' 

claim  to) 186 

Trade-marked  goods 7,88,240 

Trade  papers,  advertisements  of  mail-order 

houses  h) 203 

attitude  toward  branch  retail  stores 138 

attitude  toward  cooperative  stores 193 

establishment  of  catal(%-house  committee 

suggested  by 104 

influence  in  caustog  formation  of  associa- 

tlOTis 129,179,181 

Transportation  charges,  activities  of  asso- 
ciations  57,67-73, 74n 

changes  in 69 

cooperation  between  implement  manufac- 
turers'and  dealers' associations 71,72,73 

early  activities  of  associations 13 

See  aleo  Rate-advance  cases. 
Traveling   salesmen,   dissemination   oi  in- 
formation by 103 

functions  in  cost  educational  movement —       82 
Tri-State  Vehicle  and  Implement  Dealers' 

Association 10,135,153,154,241 

Troy  Wagon  Works  Co 28 

Twin  City  Implement,  Vehicle  and  Hard- 
ware Club  (eee  also  Jobbers,  Minne- 

apdis) 150,176,177,234 

Twine,  binder,  cooperation  among  manufoc- 

turers  of 8 

Tjrpes,  farm-machinery 86 

Unfair  lists  (see  also  Direct  sales,  disseminat- 

tag  notice  oO 115,157,193 

United  States  circuit  court,  district  of  South 

Dakota 194,195 

United  States  House  of  Representatives 
Committee  on  Post  Offices  and  Post 
Roads 199,200,201 

United    States    Supreme    Court,    decision 

against  Mississippi  lumbermen 159,160 

Vehicle  Woodstock  Co. ,  conference  with  farm- 
wagon  manufacturers 69 

Virginia  and  North  Carolina  Retail  Imple- 
ment, Machinery  and  Vehicle  Dealers' 
Association 11,178,179 

Vocational  training •.•....•••• 58 

Wagon  makers' committee 29 

Wagon  manufacturers,  conference  of  southern       13 

distributing  arrangements 6 

meetings 17,18 

See  aieo  National  Wagon  Manufacturers' 

Association;  National  Implement  and 

Vehicle  Association,  trade  departments; 

Wagons,  farm. 

Wagon  trade,  relation  of  cost  educational 

movement  to 224,225 

Wagons,  form,  advance  in  cost  of  materials 
for.    See  Materials,  cost  of. 

classification 23 

cooperation  amcmg  early  manufacturers  of.        8 
Intarnatk>nal  Harvester  Co.,  trade  in 23 


367 


Page. 


Wagons,  whdesaleprices  of.  21,22-41, 47,49,50,51,52 

specifications,  standard 27,28,52 

uniform  price  list 23,36 

Warranty,  abuse  of 13 

exx>ense 86 

legislation 86,87 

Ways  and  Means  Committee,  United  States 

House  of  Representatives 98,99 

Weber  Wagon  Co 29 

Western  classification  committee,  negotiations 

of  implement  manufacturers  with..  67,72,73 
Western  classification  No.  51,  activities  of  im- 
plement manufocturers'  and  dealers' 

associations 71, 72, 73 

Western  rate-advance  case,  decided  by  Inter- 
state Commerce  Commission 68 

Western  Retail  Implement  Dealers'  Associa- 
tion. See  Western  Retail  Implement, 
Vehicle  and  Hardware  Association. 
Western  Retail  Implement  and  Vehicle  Deal- 
ers' Association.  See  Western  Retail 
Implement,  Vehicle  and  Hardware 
Association. 
West«-n  Retail  Implement,  Vehwle,  and 
Hardware       Association,        by-laws  . 

amended 132 

cooperation  with  other  associations 83, 

110, 133, 134, 136, 146, 150, 194 

cost  educational  activities 83 

direct  selling,  opposed  by 12:, 

130, 146, 148, 149, 162, 173, 178, 189, 190 

directory  of  dealers  published  by 134, 135 

dissemination  of  notice  of  direct  selling 185. 

189,190 

early  activities 13 

executive  sessions 131,148,149 

fire  insurance.  Reciprocal  Underwriters  or- 
ganized      75n 

formation 9 

freight  auditing  bureau  established 73-74n 

Kansas   City    Retail   Hardware   Dealers' 

Club,  affiliation  with 183,184 

legal  advice  as  to  disseminating  information     185 

local  clubs  organized 214,215,216,239 

mail-order  houses  opposed  by 193, 

194,195,197-198 

membership 10 

method  of  handling  members'  complaints.     129, 

130,132,172,173,174,175 

pledges  Of  members 193,206 

price  activities 16,19,211 

prison  manufacturing  opposed  by 110 

proceedings  at  meetings 129,130,131 

summary  of  accomplishments 149 

Wheel  heights,  reduction  in  number 29, 30, 49 

Wilson  tariff  biU 98 

Windmill  manufacturers,  conference   with 

dealers'  federation 138 

dealers  criticize  distributing  methods  of. . .     150 
Wind-stacker  patents-license  system,  acquisi- 
tion of  patents  by  Indiana  Manufoctur- 

ingCo 113,115n 

decision  of  courts  on  validity 117, 118, 122 

license  contract,  changes  in  form 115, 116 

manufACtorers,alleged  agreement  among.    123n- 

124n,126 


368 


IKBBX. 


Wind-stacker   pst«ntt-llc«ns«   systmt, 

origiii 111-113 

plan  to  proloog  dmfttiOD 11& 

prices,  aslUng,  fixed  by U2 

public  interest  in 125,127 

significance 125-127 

suits  against  licensees 117, 

122, 122n,  123, 123n,  134,  IMn,  125 
Wind  staeken,  cost  and  profits  of  mano&o- 

torers 112n 

selllngprioe 66,112 

Winona  Wagon  Co 29 

Winoosia  Maonhctureis'  Association 97 


prisoo-lMtorylegiBlatkm  la 106, 

106,10»,110 
WImmhIb  BetaO  Implement  and  Vehfeto 

Deakn' Association 11 

kieal  clubs  in  territory  of 239 

Wood  stock,  wagon,  arrangements  to  bclll> 

tate  production 09 

standard  dimensions  for ••>•  56(03 

Workmen's  indemnity  compensation.    8tt 
Industrial  indemnity  legtilationi 


Yellow  Fine  Manulacturers'  Associatira. 


I 


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